Stock of the Day

February 28, 2020

Thomson Reuters (TRI)

$176.58
-$0.22 (-0.1%)
Market Cap: $79.56B

About Thomson Reuters

Thomson Reuters Corporation engages in the provision of business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-driven technologies, including generative AI, integrated workflow solutions to small businesses to multinational organizations. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through Reuters News Agency, Reuters.com, Reuters Events, Thomson Reuters products, and to financial market professionals. The Global Print segment offers legal and tax information primarily in print format. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is based in Toronto, Canada. Thomson Reuters Corporation operates as a subsidiary of The Woodbridge Company Limited.

Thomson Reuters Bull Case

Here are some ways that investors could benefit from investing in Thomson Reuters Co.:

  • Thomson Reuters Co. recently increased its quarterly dividend to $0.595, reflecting a commitment to returning value to shareholders. This increase from the previous dividend of $0.54 represents an annualized dividend of $2.38, which can be attractive for income-focused investors.
  • The company reported earnings per share (EPS) of $1.01 for the latest quarter, surpassing the consensus estimate of $0.97. This positive earnings surprise indicates strong financial performance and can boost investor confidence.
  • Thomson Reuters Co. has a solid return on equity of 14.78%, suggesting effective management and profitability relative to shareholder equity, which is a positive indicator for potential investors.
  • The stock is currently trading around $176.03, close to its 1-year high, which may indicate strong market performance and investor interest, suggesting potential for further growth.
  • Analysts have a consensus rating of "Hold" for Thomson Reuters Co., with a price target of $176.10, indicating that the stock is viewed as stable with potential for appreciation.

Thomson Reuters Bear Case

Investors should be bearish about investing in Thomson Reuters Co. for these reasons:

  • The payout ratio is currently at 44.17%, which indicates that a significant portion of earnings is being distributed as dividends. While this can be attractive, it may also limit the company's ability to reinvest in growth opportunities.
  • Despite recent upgrades from analysts, the stock has received a mix of ratings, with several analysts maintaining a "Hold" rating, suggesting that there may be limited upside potential in the near term.
  • Thomson Reuters Co. operates in a competitive market for business information services, which could impact its market share and profitability if competitors introduce more innovative solutions.
  • Institutional ownership is at 17.31%, which may indicate a lack of strong institutional support compared to other companies, potentially leading to volatility in stock performance.
  • The stock's recent performance, while strong, is close to its 1-year high, which may suggest that it is overvalued at current levels, posing a risk for new investors entering at this price point.

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