The investment climate of April 2024 is complex, to say the least. The S&P 500 Index ($SPX) just endured a six-day losing streak - its longest since last October - largely driven by tech stocks. With rate cut hopes diminishing fast, investors are now hanging their hopes on corporate earnings to move markets higher… but the Q1 season has delivered mixed results so far. 

In times like these, dividend stocks have always been the go-to for investors looking for that steady income flow and potential for their money to grow.

But there's a special breed among these dividend-paying stocks, and they're called the "Dividend Kings" - companies that have been increasing their dividends year after year, for at least 50 straight years.

S&P Global (SPGI) fits this profile well, with exactly a half-century of steady dividend growth to its name. Along with the title of Dividend King, S&P Global was recently added to Bank of America's (BAC) US 1 List, which highlights the firm's top investment picks from its pool of “buy”-rated stocks.

And perhaps even more compelling, SPGI just joined the ranks of Q1 earnings winners, too. Let's take a closer look to see what's driving SPGI to the top of everyone's lists.

SPGI's Unique Market Value

S&P Global Inc. (SPGI) has carved out a formidable niche in the financial information services sector, becoming an indispensable source of ratings, benchmarks, analytics, and data solutions worldwide. Its robust business model has made it a linchpin in market intelligence and decision-making. Valued at $132 billion, SPGI is the parent of the S&P 500 itself, the Dow Jones Industrial Average ($DOWI), S&P Global Ratings, and Platts, amongst other recognizable names.

When it comes to market performance, SPGI has been lagging its own benchmark. The stock is off 5.8% on a YTD basis, and up 20% in the last 52 weeks. By comparison, the SPX is 24% higher in the last year, and up nearly 6% so far in 2024.

Valuation-wise, SPGI trades at a premium to the broader market, with a forward P/E ratio north of 29 and a forward price/sales ratio of 9.64. But bulls argue this premium is justified, given SPGI's strong competitive position. The company has exceptional pricing power in its credit ratings, index subscriptions, and Platts commodities info businesses, since it's so hard to displace those entrenched benchmarks. 

In fact, both of these metrics are currently slightly below SPGI's five-year historical average multiples.

S&P Beats & Raises

In terms of earnings, SPGI closed higher today after its Q1 results. The company reported Q1 adjusted EPS of $4.01, which comfortably beat the consensus estimate. Revenue improved to $3.49 billion, edging past expectations for $3.41 billion.

Looking ahead, SPGI expects full-year EPS to range between $13.85 and $14.10, up from its prior guidance for $13.75 to $14.00. Revenue is expected to increase 6-8% to a range between $13.25 billion and $13.5 billion, with adjusted margins projected to expand as much as 150 basis points.

While management hiked its guidance across the board, SPGI's gains were muted today as analysts had their sights set somewhat higher. At the midpoint, the updated forecasts still fell short of Wall Street's consensus for 2024 EPS of $14.11 and revenue of $13.42 billion.

What Do Analysts Expect for SPGI?

Ahead of its earnings report, SPGI stock got a big vote of confidence from Bank of America analysts, who added it to their prestigious US 1 List of top investment ideas. BofA has a $530 price target on SPGI, which indicates expected upside of 27.5% from current levels.

Analysts are unanimous in their enthusiasm, with a resounding “Strong Buy” rating across the board. Of the 19 analysts chiming in, 16 are advocating a “Strong Buy,” while 3 are leaning towards a “Moderate Buy.” Not one recommends selling this Dividend King. 

However, BofA's price target is more ambitious than most. The mean price target for SPGI is $485.41, about 16.7% above Thursday's close.

Looking ahead, the recent launch of Generative AI Search on the S&P Global Marketplace could drive future growth. This move to make market data more accessible is likely to strengthen SPGI's position as a leader in data and analytics, attracting more users to its platform and potentially increasing its revenue streams. Adding to its arsenal, SPGI's planned acquisition of Visible Alpha is set to enhance its investment research offerings on the S&P Capital IQ Pro platform. This move is expected to deliver a top-tier suite of fundamental investment research tools, likely attracting a wider audience and increasing user engagement.

Notably, forward EPS growth projections of 12% and longer-term EPS growth of 13% outpace both the broader financial industry and SPGI's own five-year historical averages.

S&P's Dividend History

But most investors don't buy Dividend Kings for the growth potential, and SPGI's impressive dividend history underscores its financial stability and commitment to rewarding shareholders. 

The company has paid dividends consistently since 1937, and has increased them annually for the last 51 years, securing its status as a Dividend King. The latest dividend was declared at $0.91 per share, for a dividend yield of 0.88%.

The dividend growth rate over the last five years stands at 12.54%, supported by a sustainable payout ratio of 28.55%.

Wrapping things up, it's clear that S&P Global isn't just resting on its laurels as a Dividend King. With strategic moves that keep it ahead of the curve and a win on earnings during a tough Q1 season, SPGI is a stock that's winning top ratings from analysts for good reason. For investors seeking a blend of tradition and innovation, this dividend stock could be a match made in financial heaven.