Moody’s Corporation (NYSE:MCO) and S&P Global Inc. (NYSE:SPGI) are the two halves of one of the best moats in finance. Together, these two rate roughly 80% of the world’s debt. Both have sold off on worries that higher rates slow the pace of debt issuance. But they trade at different prices, MCO near 30 times earnings and SPGI near 25 times, and they are built differently. That gap creates two choices for investors: pay up for Moody’s ratings focus or buy S&P’s cheaper but more diversified mix.
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S&P Global: The Diversified One, on Sale
S&P Global is the more spread-out of the two. Credit ratings are its single biggest business, yet they bring in only about a third of revenue. The rest comes from four other segments including Market Intelligence data, Commodity Insights (the Platts energy-pricing franchise), the Mobility auto-data unit, and S&P Dow Jones Indices, which owns the S&P 500 and collects a recurring toll on the trillions that track it. S&P is also pushing beyond its core: it recently expanded into onchain finance through a deal with OpenZeppelin.
Most of these spreads are heavily subscription-based, with the recurring revenue of some above 80%, which softens the impact when debt issuance slows. After a roughly 29% drop to near its 52-week low, S&P trades around 25 times earnings. This new multiple is the cheapest in years, and almost every covering analyst rates it a Buy with about 33.3% upside. The bears, however, are worried about the number of segments to run, especially when some, like Mobility, carry their own cycles.
S&P recently ranked
S&P Global Inc. has also raised its dividends for 54 consecutive years, putting it among the 10 Best Dividend Kings to Buy According to Hedge Funds.
Moody’s: The Higher-Margin, Ratings-Levered One
Moody’s ratings arm is its prized business, earning roughly 68 cents of operating profit on every revenue dollar. Meanwhile, its Analytics arm adds risk data and software that is about 98% recurring. With this narrowed focus, Moody’s owns the ratings toll booth, which is why the stock usually commands a premium, now around 30 times earnings. It also fell less than S&P, down about 19% from its high. The stock has also received a consensus Buy, and analysts see roughly 28% upside. The drawback is that with more of the business tied to ratings, Moody’s leans harder on debt issuance staying healthy. If borrowing booms, it has more to gain. But if issuance stalls, it has more to lose, and the premium multiple leaves less cushion.
The Trade-Off
So the choice comes down to diversification versus leverage. S&P gives you the Indices and data businesses to cushion the ratings cycle. And it comes at a cheaper multiple after a bigger fall, which appeals if you are looking for a combination of ballast and value. Moody’s gives you the highest-margin, most focused ratings exposure, which would attract investors seeking maximum leverage to a debt-issuance rebound and will pay up for it. Both are elite duopoly franchises marked down on the same worry. Whether diversified value or ratings leverage suits you better is your call.
Institutional Positioning
Both are widely held, with S&P Global Inc. the more popular. Insider Monkey data shows 124 hedge funds owned S&P Global at the end of the second quarter of 2026, up from 122 the quarter before, while 100 held Moody’s Corporation, up from 95. Though the growth in institutional interest is modest, their number as of Q2 significantly reflects confidence in the stock.
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This article is originally published at Insider Monkey.
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