SPGI offers attractive forward returns driven by ~10.6% earnings growth and valuation expansion following the mobility spin-off.

And the first one is S&P Global, a stock we've been watching closely over the last year. Because in the last year now, it's down by 26% and year-to-date down by 21.3%.

Now, what's interesting about this is if we jump over to our stock screener and look at S&P Global, I want you to pay close attention to something. Revenue per share for S&P Global has been incredibly stable over the past decade and earnings per share for the most part has been as well.

They've seen incredible growth. So, naturally, if revenue and earnings have been growing, particularly in the last few years, but the share price has seen a rather large pullback, what does that mean?

Well, it means the valuation multiple has declined substantially. On average over the last 5 years, the stock has traded at a PE multiple of 28.8. The company has traded at a premium, but now it's trading at a PE multiple of 21.6, pretty close to that of the S&P 500, very close to the average of the S&P 500.

So, the question is, does S&P Global no longer deserve to trade at a premium? And really, we can only answer that question by analyzing the business model itself. So, who is S&P Global?

What exactly do they do? Now, we've discussed this before, but they have a few primary business segments. They have ratings, market intelligence, indices, and energy, and they just recently spun off their mobility division.

Now, why is it so important that they spun off the mobility division? Well, the ratings business is a very high-quality business model. This is where they issue credit ratings, and it's one of the larger business segments for this company, 4.7 billion in revenue with incredible margins.

So, anytime a company is issuing debt, a lot of the times S&P Global will issue a rating. And if you've been paying attention to the debt markets so far in 2026, there is a lot of debt being issued.

Big Tech has raised more than 350 billion in debt since 2025, and guess who's assigning credit ratings to that debt? It's S&P Global. So, this surge in debt markets, this surge in issuing bonds is very bullish for S&P Global.

And there's no signs that this debt issuance is slowing down anytime soon.

Then of course, we have the indices business, a very passive business model for S&P Global that has incredible margins. S&P Global owns or at least administers major benchmarks including the S&P 500 and a huge ecosystem of indices used by ETFs, mutual funds, pensions, as well as derivatives also.

So when assets flow into those products linked to those indices, S&P Global also earns a licensing revenue.

So you can see these are incredibly high-quality business models. They're very attractive and provide very stable and predictable cash flows. The same wasn't necessarily true for the mobility division, which here's why this is great news.

Now that they've spun this division off, you can argue the entire business as a whole now is even higher quality. And naturally what happens? Higher quality businesses deserve higher valuation multiples.

Now of course, that's also assuming that earnings growth continues to be strong. A stock not growing earnings at a high rate certainly doesn't warrant a higher valuation multiple.

So naturally, how fast is this stock actually projected to grow earnings at least over the next few years? Well, if we jump over to our sensitivity analysis, what you'll notice is the projected EPS CAGR is sitting at about 10.58% with it being particularly high over the next few years. So that's certainly a good sign.

Now complete transparency like always, before we run it through this valuation model, S&P Global is a stock that I own in my personal portfolio. The portfolio has done very well so far in 2026, one of my best years in a while.

I've only added three new positions to the portfolio, MPLX, a high yielder that's done very well. Mastercard, a stock that's outperforming in my portfolio, but S&P Global is down by about 15%.

So what do forward-looking returns potentially look like for S&P Global from this point moving forward? Well again, let's look at that sensitivity analysis. Assume that they achieve this projected EPS CAGR, which is the average estimate from analysts at 10.58% earnings growth, and assuming a PE multiple that's slightly higher than how the company's currently being valued, which I think is justified considering the spin-off of the mobility division, and especially considering the fact that historically they've been valued at a much higher PE multiple, what you can see is forward-looking returns, particularly just over the next few years, look very attractive, definitely outperforming historic market average returns.

And keep in mind, that doesn't even include the dividend when you're looking at about a 13, 12, or 11% yield, which S&P Global does have a lower yield. It's only sitting close to around 1%, but keep in mind, this is a stock that is a dividend king with over 50 consecutive years of dividend increases, and they're using very little of their free cash flow to actually pay out dividends.

It's only a 21% free cash flow payout ratio. So, you'll definitely see solid levels of dividend growth in the future.