The financial intelligence company has an improved outlook, analysts said.
"Over the past three years, McGraw Hill completed the divestitures of broadcasting, education, and aviation week and recently announced the sale of McGraw Hill Construction for $320M, eliminating all non-financial operations while expanding financial advisory, pricing and analytical services over this period and achieving a compound growth rate of 11% in revenues and 26% in adjusted EPS," analysts said.
"McGraw Hill has also returned over $5B to shareholders through dividends and share repurchases over the time frame. We believe McGraw Hill remains positioned for continued strong growth through increased market penetration," analysts added.
Shares of McGraw Hill closed up 0.45% at $91.13 on Friday.
Separately, TheStreet Ratings team rates MCGRAW HILL FINANCIAL as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MCGRAW HILL FINANCIAL (MHFI) 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 solid stock price performance, revenue growth, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, MHFI's share price has jumped by 27.33%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MHFI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for MCGRAW HILL FINANCIAL is rather high; currently it is at 68.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.12% is above that of the industry average.
- Net operating cash flow has significantly increased by 110.61% to $377.00 million when compared to the same quarter last year. In addition, MCGRAW HILL FINANCIAL has also vastly surpassed the industry average cash flow growth rate of 57.47%.
- You can view the full analysis from the report here: MHFI Ratings Report