Investors looking for worthwhile investments often focus on earnings when selecting stocks. But the real test lies in what management does with that money – hence our series examining company cash flow statements to see exactly how much is earned and used by each organization. Today we will examine McGraw Hill.
Although most associate McGraw-Hill with educational publishing, its business interests extend far beyond this industry. For instance, it owns a credit union offering checking, savings and money market accounts at competitive rates to employees (through making an initial $10 contribution to the VOICE Foundation) as well as residents in select New York and New Jersey areas.
McGraw Hill also owns a financial information business and ratings agency. At present, McGraw Hill controls more than 50% of S&P Global Ratings shares; additional shares would allow them to expand their footprint in this market.
Additionally, an IPO could give shareholders the chance to get some of the proceeds from the sale of educational publishing unit that’s planned by the company in order to fund stock buybacks and “tuck-in” acquisitions in financial information businesses. They estimate they will realize approximately $1.9 billion from this sale.