S&P Global Inc. : Analysis of revenue and intrinsic value of shares using Free Cashflow to Equity

S&P GLOBAL INC. is https://www.spglobal.com/en a provider of Financial intelligence solutions.

S&P Global Inc. operations consist of Five Businesses: S&P Global Market Intelligence, S&P Global Ratings, S&P Global commodity Insights, S&P Global Mobility and S&P Dow Jones Indices. S&P Global Inc. was founded in 1860 and is headquartered in New York.

 

Shareholder Return: During the three years ended December 31,2023 S&P Global Inc. has returned approximately $18.2 Billion to the shareholders through a combination of share purchases and quarterly dividends.

S&P Global Inc. Common stock trades on New York Stock exchanges under the symbol SPGI.

 

Crisil Limited https://www.crisil.com/ is an Indian Analytical company providing ratings, research and advisory services and is a subsidiary of S&P Global Inc.

 

Revenue analysis of S&P Global Inc. for the last three years

Revenue mix in US$ Millions	2023	2022	2021
Market Intelligence	4376	3811	2185
Ratings	3332	3050	4097
Commodity Insights	1946	1685	1012
Mobility	1484	1142
Indices	1403	1339	1149
Engineering Solutions	133	323
Inter segment elimination	(177)	(169)	(146)
Total Revenue	12,497	11,181	8,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FCFE Details of S&P Global Inc. shown below, US$ in millions, except per share data

 

Year	Value	FCFE or Terminal Value	Present Value at 15.51%
0	FCFE0	3671	3671
1	FCFE1	3857	3178
2	FCFE2	4129	2891
3	FCFE3	4500	2679
4	FCFE4	4993	2528
5	FCFE5	5639	2429
5	Terminal Value (TV5)	253,739	17,376

Intrinsic value of S&P Global Inc.	$140,769
Market cap of S&P Global Inc.	$160.354 Billion
Intrinsic value of S&P Global Inc. common stock (per share)	$452.34
Current share price on 12/07/2024	$516.77

 

Required rate of Return

Assumptions

Rate of return on LT Treasury Composite(Rf)	4.36%
Expected rate of return on market portfolio(E(RM)	13.81%
Systematic risk of S&P Global Inc. Common stock (β)	1.18
Required rate of return on S&P Global Inc.. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +1.18[13.81% - 4.36%]	15.5%

 

FCFE Growth rate Forecast

S&P Global Inc. H-Model

Year	Value	Growth Rate
1	g1 (PRAT Model)	5.08%
2	g2 (Linear Interpolation)	7.04%
3	g3 (Linear Interpolation)	9%
4	g4 (Linear Interpolation)	10.96%
5	g5 (Single stage model)	12.93%

 

 

 

 

 

2023 Ratio Calculations

Retention rate	60.35%
Dividend yield	0.53%
Operating Margin	32%
Profit margin	23.15%
Current Ratio	0.84
Asset turnover	0.21
Financial Leverage	1.76
Return on Asset	4.77%
Return on Equity	8.43%
EPS	8.23
PE Ratio	62.79
Price to Sales ratio	12.83

 

 

 

 

 

 

Sources : Form 10K of S&P Global Inc. for the fiscal year 2023 https://investor.spglobal.com/sec-filings-reports/annual-reports/default.aspx , https://www.stock-analysis-on.net/ , https://finance.yahoo.com , https://companiesmarketcap.com/

 

 

 

 

 

 

 

 

 

 

 

Disclosures

This report is based on information obtained in good faith from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments.

 

 

VISA INC. Overview of Business and Intrinsic Value of Shares

VISA INC is https://corporate.visa.com/ one of the world s leaders in digital payments.

Since early days of VISA INC in 1958, Visa has been in the business of facilitating payments between consumers and businesses. Visa focused on extending, enhancing and investing in proprietary advanced transaction processing network, VisaNet, to offer a single connection point for facilitating payment transactions to multiple endpoints through various form factors.

 

During fiscal year 2023, 276 billion payments and cash transactions with Visa s brand were processed by Visa or other networks, equating to an average of 757 million transactions per day. Of the 276 billion total transactions, 213 billion were processed by Visa.

 

Visa earns revenue by facilitating money movement across more than 200 countries and territories among a global set of consumers, merchants, financial institutions and government entities through innovative technologies.

FCFE Details of Visa INC. shown below, US$ in millions, except per share data

Year	Value	FCFE or Terminal Value	Present Value at 13.33%
0	FCFE0	21,037	21,037
1	FCFE1	28,189	18,568
2	FCFE2	36,308	21,960
3	FCFE3	44,895	24,964
4	FCFE4	53,187	27,245
5	FCFE5	56,378	28,488
5	Terminal Value (TV5)	815,294	142,261

Intrinsic value of Visa INC.	$554,730
Market cap of Visa INC.	$50.552 Trillion
Intrinsic value of Visa INC. common stock (per share)	$344.55
Current share price on 11/15/2024	$309.64

 

Required rate of Return

Assumptions

Rate of return on LT Treasury Composite(Rf)	4.36%
Expected rate of return on market portfolio(E(RM)	13.81%
Systematic risk of Visa INC. Common stock (β)	0.95
Required rate of return on Visa INC. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +0.95[13.81% - 4.36%]	13.33%

 

 

 

 

 

 

FCFE Growth rate Forecast

Visa INC. H-Model

Year	Value	Growth Rate
1	g1 (PRAT Model)	34.02%
2	g2 (Linear Interpolation)	28.88%
3	g3 (Linear Interpolation)	23.65%
4	g4 (Linear Interpolation)	18.47%
5	g5 (Single stage model)	6.02%

 

2023 Ratio Calculations

Retention rate	78.28%
Dividend yield	0.5%
Profit margin	52.89%
Asset turnover	0.36
Return on Asset	19%
Current Ratio	1.45
EPS	9.72
PE Ratio	31.86

 

 

 

 

 

 

 

 

 

Sources : Form 10K of Visa INC. for the fiscal year 2023 https://annualreport.visa.com/home/default.aspx , https://www.stock-analysis-on.net/ , https://finance.yahoo.com , https://companiesmarketcap.com/

 

 

Disclosures

This report is based on information obtained in good faith from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments.

 

 

HP INC. Overview of Business and Intrinsic value of Shares

HP INC is https://investor.hp.com/overview/default.aspx a leading global provider of personal computing and other digital access devices, imaging and printing products, and related technologies, solutions and services. HP INC sell to individual consumers, small- and medium-sized businesses ("SMBs") and large enterprises.

HP have three reportable Segments: Personal Systems, Printing and Corporate Investments.

Personal Systems offers commercial and consumer desktops and notebooks, workstations, thin clients, commercial mobility devices, retail point-of-sale ("POS") systems, displays, hybrid systems (includes video conferencing cameras and solutions, headsets, voice, and related software capabilities including all products and solutions acquired from Poly), software, support and services.

Printing provides consumer and commercial printer hardware, supplies, services and solutions. Printing is also focused on Graphics and 3D Printing and Personalization in the commercial and industrial markets.

FCFE Details of HP Inc. shown below, US$ in millions, except per share data

Year	Value	FCFE or Terminal Value	Present Value at 14.6%
0	FCFE0	2937	2937
1	FCFE1	3195	2563
2	FCFE2	3522	2433
3	FCFE3	3933	2340
4	FCFE4	4447	2280
5	FCFE5	4714	2250
5	Terminal Value (TV5)	58112	14804

Intrinsic value of HP Inc.	$44203
Market cap of HP Inc.	$35.46 Billion
Intrinsic value of HP Inc. common stock (per share)	$45.15
Current share price on 11/13/2024	$36.81

 

Required rate of Return

Assumptions

Rate of return on LT Treasury Composite(Rf)	4.36%
Expected rate of return on market portfolio(E(RM)	13.81%
Systematic risk of HP Inc.. Common stock (β)	1.09
Required rate of return on HP Inc. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +1.09[13.81% - 4.36%]	14.66%

 

 

 

 

 

 

FCFE Growth rate Forecast

HP Inc.. H-Model

Year	Value	Growth Rate
1	g1 (PRAT Model)	8.8%
2	g2 (Linear Interpolation)	10.22%
3	g3 (Linear Interpolation)	11.67%
4	g4 (Linear Interpolation)	13.09%
5	g5 (Single stage model)	6.00%

 

2023 Ratio Calculations

Retention rate	68.21%
Dividend yield	2.92%
Profit margin	6.07%
Asset turnover	1.45
Return on Asset	8.81%
Current Ratio	0.73
EPS	3.33
PE Ratio	10.4

 

 

 

 

 

 

 

 

 

Sources : Form 10K of HP Inc. for the fiscal year https://investor.hp.com/overview/default.aspx , https://www.stock-analysis-on.net/ , https://finance.yahoo.com , https://companiesmarketcap.com/

 

 

Disclosures

This report is based on information obtained in good faith from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments.