MSCI Inc.

Methodology

MSCI's index and analytics subscription model generates highly predictable recurring revenue with exceptional earnings visibility from institutional client relationships. Asset-based fees create stable growth tied to market levels and client adoption. The high-quality business model with minimal capital requirements makes earnings projections straightforward and reliable.

Methodology

MSCI consistently commands premium PEG ratios reflecting exceptional business quality, recurring revenue characteristics, and oligopolistic positioning in index provision and risk analytics. While expensive on absolute terms, the asset-light model and secular tailwinds from passive investing justify valuations. Compare to MSCI's historical range and other financial data providers like S&P Global.

Methodology

MSCI offers a modest dividend as management prioritizes aggressive share buybacks given the capital-light business model and strong cash generation. Buybacks significantly supplement the moderate dividend yield. For this high-quality compounder, total capital returns through dividends and repurchases matter more than yield alone in driving shareholder value.