FactSet Research Systems Inc. (FDS): A Play on the Ever-Rising Need for Financial Data

Page 1 of 2

FactSet Research Systems Inc. (NYSE:FDS) is a leading provider of data services to the financial industry. Over the past decade, the company’s business has really taken off, and shares have gained accordingly. With the growing need for data in the industry, is there still time to get in on this growing company, or has the opportunity passed us by?

About FactSet Research Systems

FactSet Research Systems Inc. (NYSE:FDS) provides economic and financial data to investment professionals, combining its own content with content from hundreds of other sources into a single online data source. The company designs personalized workspaces for investment managers, hedge funds, investment bankers, quantitative researchers, and more. Their features include market analytics, financial data, financial screening, and many others.

FactSet Research Systems Inc. (NYSE:FDS)Over the past several years, acquisitions have been one of the main drivers of growth in the company. To name a few, in 2008 FactSet Research Systems Inc. (NYSE:FDS) purchased a copy of the Thomson Fundamentals database for $62 million, which included historical financial data on tens of thousands of companies. Last July, Fact Set acquired StreetAccount, which greatly expanded its real-time news and analytical capabilities. The company also strives to develop and perfect its own proprietary content in order to offer more differentiated content and services than any of its competitors.

The Numbers

Given its growth in revenues and earnings over the years, FactSet Research Systems Inc. (NYSE:FDS) actually seems inexpensive at the current price level. At about 23 times last year’s earnings, the company’s valuation is pretty close to its historical average. FactSet is expected to earn $4.58 per share for the current fiscal year, and this is projected to increase to $5.05 and $5.73 in 2014 and 2015, respectively. This translates to a three-year average annual earnings growth rate of just under 12%, which is about what I would expect with such a P/E ratio.

Also worthy of consideration is FactSet Research Systems Inc. (NYSE:FDS)’s modest, but significant, dividend yield of 1.4% annually, which has been raised consistently over the years. Also, one of my favorite things to see in prospective investments is more cash than debt, and FactSet definitely meets this standard, with over $200 million in cash and no debt whatsoever.

Other Ways to Play

Although not an apples-to-apples comparison, Intuit Inc. (NASDAQ:INTU) is a pretty close peer in terms of publicly traded financial data software companies. Intuit Inc. (NASDAQ:INTU) is best known for its flagship accounting and tax preparation software programs QuickBooks, TurboTax, and Quicken. Intuit has experienced similar revenue growth to FactSet Research Systems Inc. (NYSE:FDS) as more people are transitioning to online methods of managing finances, and are expected to grow at a similar 12% rate going forward. Shares trade at a P/E of 20 times TTM earnings, and Intuit Inc. (NASDAQ:INTU) has a similarly impressive balance sheet. The company does have some debt, but it is overshadowed by a nice stockpile of cash.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!