MSCI: Wide Moat Index Manager

MSCI Inc (MSCI), the global financial analytics company behind famous indexes like the MSCI World Index, introduced a dividend in 2014 and has continued to raise it ever since. Besides the growing dividend MSCI arguably has a wide moat.

Is it worth considering as an addition to your dividend growth portfolio?

Hello fellow Dividend Growth Investors, I am Christoph, a 30-year-old German expat living in the great white north – Canada.

Ever since starting my investment journey in 2016 I’ve been fascinated with the strategy of Dividend Growth Investing and have been using cash flow generated from dividends to build my portfolio and achieve my desired asset allocation. My ultimate goal is to build a stream of income substantial enough to eventually support my family without the 9-5 grind.

Today I would like to introduce you to one of the companies I’ve analyzed recently to evaluate whether it’s worth a spot in your or my dividend growth portfolio.

Initial Screening

MSCI (originated from Morgan Stanley Capital International) is a global benchmark, index and analytics service provider in the financial sector. Founded in 1968, the company has continuously focused on indexes covering the global stock market. Originally known as Capital Investments, in 1986 Morgan Stanley acquired the firm, establishing MSCI, and upon another acquisition in 2004, established MSCI Barra. Just before the financial crisis, in 2007 the company was spun off in an IPO trading under the ticker MSCI on the NYSE and went fully public in 2009. Total revenue was about $1,658 million in the TTM.

MSCI’s peer group and competitors consist of other big index and data providers such as Nasdaq Inc. (NASDAQ:NDAQ), BlackRock Inc. (NYSE: BLK), and S&P Global Inc. (NYSE: SPGI).

MSCI: Wide Moat Index Manager


MSCI’s Business Model

Although MSCI is offering a multitude of products there are two operating segments which stand out from a revenue point of view. 

First off, the Indexes segment still builds the core of MSCI’s business. Each day the company calculates over 225,000 indexes, enabling individual investors and financial institutions to access market data from around the globe. There is a total of $12.1 trillion USD invested in indexes under the MSCI brand. 

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Disclaimer: I do not hold a position in MSCI Inc. (NYSE: MSCI) but the stock will remain on my watchlist.This article ...

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