The McGraw-Hill (NYSE:MHP)

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Investor Survey (help)

Business Simple to Understand?
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Dominant Industry Leader?
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Management Pay = Financial Results?
Company Possess Barriers to Entry? (swot)
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Strengths greater than Weaknesses? (swot)
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Opportunities greater than Threats? (swot)

SWOT Summary (view, help)

Weakness: Newspaper Business (0)

Threat: Ratings Issues (0)

"Buy" Indicators (help)

Insider Buying (enter symbol)
Share Buybacks (see news)
Takeover Speculation (see news)
Analyst Upgrades (enter symbol)
General Gloom and Doom (news)

"Sell" Indicators (help)

Insider Selling (enter symbol)
Executive Turnover (enter symbol)
High Analyst Ratings (enter symbol)
General Euphoria (news)
Corp. Governance & Pay (enter symbol)

Sponsors

SWOT Analysis
Company strengths, weaknesses, opportunities & threats.
Investment News
Latest investment news from Google financial.

The McGraw-Hill Companies, Inc. provides information services and products to the education, financial services, and business information markets worldwide. Its McGraw-Hill Education segment operates as a global educational publisher. This segment comprises School Education Group, which provides educational and professional development materials to pre-kindergarten to 12th grade market, as well as assessment and reporting services; and Higher Education, Professional, and International Group that provides e-books, online tutoring, customized course Web sites, subscription services, and materials to the higher education market, as well as professional, reference, and trade publishing for medical, business, engineering, and other fields. The company’s McGraw-Hill Financial Services segment, operating under the Standard & Poor’s brand, provides independent credit ratings covering corporate and government entities, infrastructure projects, and structured finance transactions; data and information services offering financial information on companies, securities, and indices; equity research; portfolio services developing global indices and investable products; and risk management and credit risk training. Its McGraw-Hill Information and Media segment includes business intelligence, analysis, and solutions, such as BusinessWeek, a business magazine; J.D. Power and Associates, a global marketing information firm that conducts surveys of customer satisfaction, product quality, and buyer behavior; Platts, a source for energy-industry information and services; McGraw-Hill Construction, which connects people, projects, and products in the design and construction industry; and Aviation Week, which provides multimedia information to the aviation and aerospace industry. Its Broadcasting Group operates nine TV stations, including four ABC affiliates and five Azteca America affiliates. The McGraw-Hill Companies was founded in 1888 and is headquartered in New York, New York.

Discretionary Industry Analysis


WikiWealth.com Industry Description: the consumer discretionary industry refers to products and services bought with discretionary (normal expenses) income. The Consumer discretionary sector encompasses industries that tend to be the most sensitive to economic cycles and stock market swings. Its manufacturing segment includes automotive, household durable goods, textiles & apparel and leisure equipment. The services segment includes hotels, restaurants and other leisure facilities, media production and services and consumer retailing. Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: During economic recessions, consumers tend to cut back on discretionary expenses to save money during those tough economic times. Less spending by consumers eventually decreases business revenue and stock prices. During economic recoveries, consumers have more discretionary income, so spending quickly increases. Higher spending increases business revenue and eventually increases stock prices. During long economic expansions, discretionary income increase, but at a slower pace than during the initial economic recovery stage.

Discretionary Financial Statistics Stat Notes
Stock Rating Buy
Potential (safety margin) 52% High ~ Good for investors
WACC Analysis 8% Low ~ Good for investors
Enterprise Value Multiples Stat Notes
Revenue EV Multiple 1.1x
EBITDA EV Multiple 5.5x Low ~ Good for investors
EBIT EV Multiple 8.4x Low ~ Good for investors
Cash Flow EV Multiple 12x Low ~ Good for investors
Book Value EV Multiple 1.4x
Discounted Cash Flow Stat Notes
Revenue Growth 10%
EBITDA Margin 17%
EBIT Margin 12%
Cash Flow Margin 5%
Taxes Rate 34%
Debt-Equity Ratio 58% High ~ Bad for investors
ROIC 6%
Reinvestment Rate 20% High ~ Bad for investors
WACC Discount Rate Stat Notes
Risk Free Rate 4% Low ~ Good for Investors
Cost of Debt 7% Low ~ Good for Investors
Equity Risk Premium 7%
Debt Required Return of Debt 5% Low ~ Good for Investors
Required Return of Equity 9%

1 Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.
2 The weighted average cost of capital (WACC) analysis for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC analysis offers both stability and accuracy for each individual company.

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WikiWealth.com Industry Profit Analysis: The best way to profit from discretionary stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). When an economic recovery occurs, discretionary stocks tend to outperform the general stock market, because consumers quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually those investments become overvalued, because profits and stock prices increase past their fair values. In other words, the margin of safety becomes low or negative. During the last stages of an economic business cycle, just before a recession, it is best to sell discretionary stocks, because they are likely to decrease in price the fastest. Selling an stock investment is difficult do properly. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. As a general rule, the larger the investment potential (margin of safety), the safer the investment. For more information on stock research ratings click here.

Investment Moats


Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Brand Name (Votes:1) Strong brand name helps to increase margins by charging premium prices for goods, because…
Low Cost Product (Votes:1) Should do better an in economic recession since goods are priced low. Low cost provides…
Stable Business (Votes:0) Low discount rates and stable businesses increase the companies value, because future cash flow…

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Newspaper Business (Votes:0) The decline of newspaper and magazine publishing and distribution will hurt revenue growth and…
Debt Level (Votes:0) High leverage could be dangerous in a declining market. Partially reflected in the beta…

Stock Price Triggers


Stock Price Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Election Advertising (Votes:0) Advertising in all medias should increase due to the expected election year advertising surge….
Stimulus Package (Votes:0) The stimulus packages is expected to increase spending by consumers and the government. It also…
Infrastructure Spending (Votes:0) Plans to spending large amounts of money in infrastructure should increase the demand for…

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Ratings Issues (Votes:0) Consideration attention is given to the failure of ratings agencies to give accurate ratings in…
Cyclical Industry (Votes:0) Cyclical industry performance goes in line with the rest of the economy. Sometimes this…

Long Company Description (help)


mhp-1.jpg

The McGraw-Hill Companies, Inc., (NYSE: MHP) is a publicly traded corporation headquartered in Rockefeller Center in New York City. Its primary areas of business are education, publishing, broadcasting, and financial and business services. It publishes numerous textbooks and magazines, including BusinessWeek and Aviation Week, and is the parent company of Standard & Poor's and J.D. Power and Associates.

history

The McGraw-Hill Companies traces its history back to 1888 when James H. McGraw, co-founder of the company, purchased the American Journal of Railway Appliances. He continued to add further publications, eventually establishing The McGraw Publishing Company in 1899. His co-founder, John A. Hill, had also produced several technical and trade publications and in 1902 formed his own business, The Hill Publishing Company.

In 1909 both men, having known each other for some time and sharing the same interests, agreed upon an alliance and combined the book departments of their publishing companies into The McGraw-Hill Book Company. John Hill served as President, with James McGraw as Vice-President. 1917 saw the merger of the remaining parts of each business into The McGraw-Hill Publishing Company, Inc.

McGraw-Hill Publishing Company, Inc became The McGraw-Hill Companies in 1995, as part of a corporate identity rebranding.

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Acquisitions

During the course of its history The McGraw-Hill Companies has expanded significantly through acquisitions, not just within the publishing industry but also into other areas such as financial services (the purchase of Standard & Poor's in 1966) and broadcasting (the 1972 acquisition of Time-Life Broadcasting).

Notable acquisitions made by The McGraw-Hill Companies

Date of Acquisition Asset Acquired Industry
1920 Newton Falls Paper Company -
1928 A.W. Shaw Company -
1950s Gregg Company Publisher of vocational textbooks
1953 Companies of Warren C Platts, including Platts Publisher of petroleum industry information
1961 F.W. Dodge Corporation Publisher of construction industry information
1965 California Test Bureau Developer of educational testing systems
1966 Standard & Poor's Financial Services
1968 National Radio Institute Correspondence School
1972 Television Stations of Time Life Broadcasting Broadcasting
1997 Micropal Group Limited Financial Services
1999 Appleton & Lange Publisher of medical information
2000 Tribune Education, including NTC/Contemporary Publisher of supplementary educational materials
2005 J.D. Power & Associates Marketing information provider

Note that this list only includes acquisitions made by McGraw-Hill, not its subsidiaries. McGraw-Hill typically does not release financial information regarding its acquisitions or divestitures.

SWOT Analysis


Quickly add a comment to improve this analysis. Remember, volunteers like you created this SWOT Analysis.

Strength (helpful to business - internal origin)

Weakness (harmful to business / internal origin)

Newspaper Business (Votes:0) The decline of newspaper and magazine…

Opportunity(helpful to business - external origin)

Threat (harmful to business - external origin)

Ratings Issues (Votes:0) Consideration attention is given to the…

Financial News Summary

Standard & Poor's Announces Change to US Index 1246499947|%e %b %Y, %H:%M %Z|agohover

S&P, under fire, needs new bond ratings chief 1246474502|%e %b %Y, %H:%M %Z|agohover

Access America Partners with Standard & Poor's 1246309719|%e %b %Y, %H:%M %Z|agohover

page_revision: 32, last_edited: 1239141659|%e %b %Y, %H:%M %Z (%O ago)
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