Business Research Sources -ch 3: Standard & Poor´s

3. Standard & Poor's

Description of Publication: Standard & Poor´s

The most encyclopedic source of narrative and financial industry analysis is Standard and Poor’s Corp. (S&P). It offers such a wide variety of publications (approximately 25) that could be useful to anyone engaged in business research that it is impossible to profile all of them in one chapter. So we won’t. Nevertheless, it is important to cover a few of the S&P publications to get a feel for their topics and format and to note names of various other works (see below) to give readers an idea of what is available. Business Research Sources focuses on publications with a broad scope; therefore, some S&P references are not included due to their complexity and specific nature. Once again you are advised to take advantage of Michael Lavin’s Business Information to get a more detailed explanation of how to utilize S&P publications.

This chapter covers Standard & Poor’s Industry Surveys and Standard & Poor’s Corporation Records. The following publications are available in many libraries in either hard cover, on-line, or CD-ROM versions.

OTC Profiles
Daily News
Statistical Service
Earnings Guide
Insurance Rate Service
Lipper/S&P Special Situations
Security Owner’s Stock Guide
Emerging & Special Situations

Trends & Projections
Bond Guide
Stock Reports
Industry Report Service
Stock Market Encyclopedia
Outlook
Market Scope
Credit Week

Standard & Poor’s Industry Surveys (annual with updates) is a comprehensive two-volume reference work offering a wealth of valuable data covering all major domestic industries. The information includes recent developments, industry basics, and company data. The analysis begins with an examination of the prospects for that particular industry. This is followed by an analysis of trends and problems presented in historical perspective. Major segments of the industry are spotlighted. Textual matter is accompanied by statistical tables and charts providing valuable background material. One unique section is titled "Comparative Company Analysis." Here one can compare the growth in sales and earnings of the leading companies in the industry and also track the profit margins, dividends, price earnings ratios, and data for each firm over a five-year span.

The analysis provides the latest developments and available industry, market, and company statistics, along with appraisals by S&P’s analysts of the investment outlook for the area covered. In using these surveys for investment research, readers must recognize that business and stock market conditions can change extremely rapidly.

More than 1,000 companies are covered in the "Comparative Company Analysis" section of Industry Surveys. Company ratio comparisons and balance sheet statistics are provided in the analytical survey. Interim revenue and income data for these same companies can be found in the earnings supplement. The earnings supplement lists the latest (at press time) revenues and earnings. This supplement is located in the front of the volume, immediately following the indexes. In addition to reporting the revenues and earnings for the latest quarter, the supplement also shows revenues and earnings for the most recent four quarters and indicates corporate return on revenues and return on equity. One especially valuable feature of the supplement is the rankings, which assist investors and other users in quickly identifying the most rapidly growing and most profitable companies within the various industry subgroups.

Standard & Poor’s cautions that while a ranking system could imply that the companies included in the tables are specially selected, such isn’t the case. The rankings are provided only to identify the fastest-growing and most profitable companies.

S&P Corporation Records (annual with updates) is a six-volume loose-leaf directory with detailed descriptions of 12,000 domestic and international public companies, with fullest coverage of the 9,000 firms that have most investor interest. Information includes history, finances, officers, directors, subsidiaries, and securities. It includes an index of firms by SIC number and a cross-reference index to subsidiaries. It’s on-line with Standard & Poor’s Corporate Descriptions (full text), and is available on Dialog and LEXIS-NEXIS (see Chapter 21). Its CD-ROM version is called Corporations CD-ROM and includes full text of coverage for approximately 9,200 companies in Corporation Records.

This publication and others from S&P are similar to Moody’s publications in many important respects, so Moody’s will not be covered in this textbook. The differences between S&P Corporation Records and Moody’s Manuals is most obviously the size and format. Corporation Records is published in loose-leaf format and arranged alphabetically. Moody’s Manuals is more comprehensive than its competitor, both in the number of companies and the amount of information. In short, what Moody’s takes 20 volumes to cover, Standard & Poor’s does in 7. An advantage of the S&P service is its faster updating. The main volumes of the Corporation Records are revised quarterly instead of annually, and the corresponding news service provides subscribers with late-breaking corporate information every business day. The updates appear in the seventh volume, called

Aside from these and other modest differences, the information in both publications is similar. Capitalization, description of securities, and lists of subsidiaries, properties, and officers can all be found in both publications.

Perhaps one of the quickest ways to get good solid investment information is to simply call one’s broker. Reason enough to start your investment portfolio early so your broker can help supply information for your research paper. Morgan Stanley Dean Witter, for example, has an outstanding research department. However, its annual investment publication, called The Competitive Edge, is available only to its client base. If you really want the inside skinny on an industry, then you could try to contact an analyst in your area of interest. The analysts may be willing to help students, but clients obviously come first, and it may be a while before you get an answer.

Something to Think About

Where can one compare the growth in sales and earnings of the leading companies in the industry and also track the profit margins, dividends, price–earnings ratios, and other data for each company over a five-year period? Could you do it?