What are we looking for?
Sustainable dividends from the financial-data providers that enable AI.
The screen
Artificial intelligence will continue to depend on big computing and big data to advance, update and fine-tune its effectiveness.
Companies such as Microsoft and IBM lead when it comes to supplying the big computing needed to power AI. At the same time, a select group of companies lead in providing the extensive library of proprietary and historical data that AI uses to anticipate and field a growing number of requests.
The need for investment information, in particular, has greatly increased the value of owning huge amounts of client data.
Our search started with dividend-paying U.S. financial information giants already offering investors strong, dependable returns and now leveraging their mountain of data to further expand those returns through AI. From there, we applied our TSI Dividend Sustainability Rating System, awarding points to a stock based on key factors:
- One point for five years of continuous dividend payments – two points for more than five;
- Two points if it has raised the payment in the past five years;
- One point for management’s commitment to dividends;
- One point for operating in non-cyclical industries;
- One point for limited exposure to foreign-currency rates and freedom from political interference;
- Two points for a strong balance sheet, including manageable debt and adequate cash;
- Two points for a long-term record of positive earnings and cash flow to cover dividends;
- One point if the company’s an industry leader.
Companies with 10 to 12 points have the most-secure dividends, or the highest sustainability. Those with seven to nine points have above-average sustainability; average sustainability, four to six points; and below-average sustainability, one to three points.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.
What we found
Our TSI Dividend Sustainability Rating System generated five stocks. Moody’s Corp. MCO-N, headquartered in New York, provides credit-risk assessment software and services, as well as related data and analytics tools to businesses worldwide. A recent partnership with Microsoft will let Moody’s use its huge database to generate revenue-boosting enhancements to its AI products. S&P Global Inc. SPGI-N, also based in New York, is a global provider of credit rating, analytic and workflow software and services for the global capital, commodity and automotive markets. The company recently added AI to a range of its offerings to add value for its clients. Jacksonville, Fla.-based Dun & Bradstreet Holdings Inc. DNB-N is a leading global provider of business decision-making data and analytics. The company and IBM Corp. have now formed a strategic partnership to link Dun & Bradstreet’s Data Cloud with IBM’s watsonx.ai - a generative AI and scientific-data platform. That will let Dun & Bradstreet’s 135,000 client businesses better leverage its mountain of data for AI-generated insights. FactSet Research Systems Inc. FDS-N, headquartered in Norwalk, Conn., is a leading provider of financial data and portfolio analytics to investment firms worldwide. The company now offers its AI Blueprint, which better leverages that pool of information. And finally, MSCI Inc MSCI-N., based in New York, provides investment decision-making tools to help clients manage their investment processes. MSCI is now introducing a series of AI tools to take advantage of its extensive financial content. (Note, strong share-price gains over the last 52 weeks help explain the meagre dividend yields of most of these financial information leaders.)
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
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