MSCI (NYSE: MSCI) is a leading data platform who provides the deeply-embedded benchmarks used by ETFs and asset managers.
A few thoughts I have about the company:
- Great, recurring income stream that is difficult for customers to displace.
- Somewhat similar to the financial profile of exchanges like CME Group or Intercontinental Exchange. Deeply-embedded within the financial services industry.
- Tied to BlackRock as largest client.
- Excellent profitability: 58% operating margin and 22% return on invested capital.
- Increased its divided by 25% last year and is buying back around 3% of its shares each year. Today it yields 1%.
- The stock appears to be ridiculously expensive; though it’s also rarely ever cheap.
Cash compounder that could be a nice opportunity to consider for any dividend-reinvesting accounts.
