(MHP) - Top Stock - Above industry average earnings growth projected

The McGraw-Hill Companies, Inc. (MHP) met or exceeded the Street's earnings estimate for 16 consecutive quarters. After posting solid financial results for the first half of 2006, the company boosted its earnings per share outlook for the remainder of the year. MHP has a current dividend yield of 1.3% and a five-year average dividend yield of 1.6%. The company's return on equity tops that of the industry average—34% compared to 26%. Full Analysis The McGraw-Hill Companies, Inc. provides information services and products to the education, financial services and business information markets worldwide. The company serves its customers through various distribution channels, including printed books, magazines and newsletters, online via Internet Websites and digital platforms, through wireless and traditional on-air broadcasting and through a variety of conferences and trade shows. MHP met or topped analysts' earnings expectations over the past 16 quarters. During this timeframe, the company surprised to the upside on 14 occasions by an average margin of 7.6%. On Jul 25, the company posted second quarter profits of $221 million, or 60 cents per share, which beat the Street by 13.2% and improved upon the prior-year by 17.7%. Revenues increased to $1.53 billion versus $1.46 billion in the second quarter of 2006—a 4.8% jump. Broken down by business segment, financial services revenue rose 13.4% to $677.3 million, the education segment's revenue fell 2.7% to $611.6 million and the company's information and media segment climbed 3.6% to $238.6 million. MHP's information and media area includes Business Week, J.D. Power and Associates and broadcast holdings. For the first six months of the year, profits and revenues were up 7.8% and 7.4%, respectively, when compared to the first half of 2005. The company increased revenues and expanded gross margins for the past nine years. MHP grew profits for four years running. Based on its impressive first-half performance, MHP raised its full-year 2006 earnings per share guidance. The company now expects profits between $2.44 and $2.49 per share, versus its prior outlook for profits between $2.36 and $2.41. Since the release of its second-quarter results, eight analysts submitted upward earnings estimate revisions for this year while seven followed suit for 2007. Earnings per share are projected to grow 12% over the next 3-5 years, with the industry forecasted to grow at an 11% clip. The Board of Directors declared a quarterly dividend of 18.15 cents per share of common stock on Jul 26. The dividend is payable on Sep 12 to shareholders of record as of Aug 28. MHP has a current dividend yield of 1.3% and a five-year average dividend yield of 1.6%. The company's return on equity tops that of the industry average—34% compared to 26%. MHP is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.6% since 1988. Because the Zacks Rank has a market cap bias, Growth & Income investors may find a greater number of large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2 Rank (Buy) stocks in their selection criteria. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home