Credit rating agencies are among the top financial stocks to invest in. Two of the largest players in the world are S&P Global Inc. (NYSE: SPGI) and Moody’s Corporation (NYSE: MCO). There is no doubt that the pandemic has crippled economies throughout the world.
Credit ratings agencies have been busy making 1190 downgrades this year. It is a little less than the record 1326 downgrades made during the 2008-2009 financial crisis. Besides the pandemic, the crash in oil prices has also lead to rating downgrades. The hospitality and airline sectors have also seen some pretty rough times lately.
S&P Global reported its Q22020 earnings on July 28th, 2020. Revenue was up 14.1% Y-o-Y while operating profit increased by 31%. The stock has returned 24.99% since the start of the year and over 80% since hitting a low during the March market crash.
Another contender for the best financial stock to buy now is Moody’s Corporation. The stock has returned 13.98% since the start of the year and 66.89% since the March market crash. Moody’s reported its Q22020 earnings on July 31st, 2020. Revenue was up 18.2% Y-o-Y while adjusted diluted EPS was up 36%.
What makes credit rating companies some of the top financial stocks to buy is the fact that they are not dependent on any one industry or customer. Credit ratings are sought after by companies in all industries. Customer concentration is low and so is the industry dependency.
With interest rates at historic lows, there is a chance that corporate America will issue more debt and take advantage of the low rates. The credit rating agencies’ role as a debt securities rater can potentially gather pace and prove to be near-to-mid-term tailwinds.