The annual investor day for Moody’s Corporation will be held on September 24th from 8:00 a.m. to 1:00 p.m. Eastern time. The event is invitation only, but a webcast is available to anyone online. Investor Days are annual event adopted by many companies to make an easy venue for sharing earnings, analysis and plans for the company. The presentations are more in depth than shareholder meetings and often useful for media and analysts as well.
Those with financial interests in Moody’s should be pleased with 2013 results. The share price has increased 78% over the last year and the second quarter results last month exceeded expectations. Moody’s rating services are 70% of the firm’s income, but diversification in revenue streams has created more stability for the company. The company is divided into two parts: Moody’s Investor Service and Moody’s Analytics. Moody’s ratings on credit of organizations determine the confidence level of whether or not a company can pay its debt. Moody’s Analytics provides research, consulting, credit analysis and other business services.
The company has increased annual revenue by a 12% average each year over the last five years. The company currently operates at a 43% margin and has been trending on profit margin increases. Profits are achieved by highly selective capital expenditure and a growing reserve of cash flow. Dividend payouts are currently at $1.00 per share, which is a 25% increase in dividends as of July 2013.
Moody’s continues to see potential for bond issuance and rating services in European markets and expanding into energy and emerging markets globally. Non-U.S. accounts are where Moody’s sees the greatest opportunity for additional revenue. The target clients for Moody’s ratings and analytics are commercial banks, governments, institutional investors, insurance companies and fixed income trading desks. The fastest growing service within the agency is currently Enterprise Risk Solutions, which target vulnerabilities and help companies prepare.