S&P Global (SPGI) Stock Looks Fully Valued Following Crypto Risk Deal

S&P Global has seen its share price fall 21.3% year to date, which puts fresh attention on a simple question for investors: Is the current valuation still supported by the returns the business earns on the capital it puts to work?

• The year to date decline of 21.3% raises the issue of whether the recent share price slide has brought S&P Global closer to, or further away from, what its capital returns can justify over time.

• The agreement to acquire OpenZeppelin, a smart contract security specialist whose tools support over US$37t in tokenized asset transfers, can shape how investors think about the firm's future mix of risk assessment services and the returns it might generate on additional investment in digital finance capabilities.

• What if you looked at S&P Global through its earnings instead? See why S&P Global's 24.1x P/E tells a different valuation story.

The issue now is whether S&P Global's current share price fairly reflects the returns it earns on its capital given this recent performance and expansion into blockchain related risk analysis.

If you want to stress test this same question about the returns companies earn on their capital across a broader set of opportunities, it is worth scanning 32 high quality undervalued stocks.