NEW YORK (TheStreet) -- MSCI (MSCI) shares climbed 5.6% to $48.91 on five times its normal daily volume Thursday after the stock index provider announced its first quarterly dividend ever.
MSCI declared an 18 cent per share quarterly dividend on October 31 to shareholders of record on October 15.
The dividend is part of the company's plan to increase its share buyback program to $850 million and "return $1 billion to shareholders by 2016."
TheStreet Ratings team rates MSCI INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MSCI INC (MSCI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income, revenue growth, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 76.3% when compared to the same quarter one year prior, rising from $61.05 million to $107.66 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for MSCI INC is rather high; currently it is at 69.78%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 42.34% significantly outperformed against the industry average.
- You can view the full analysis from the report here: MSCI Ratings Report