What are we looking for?
Sustainable dividends from companies using AI to expand the value of their financial data
The screen
The growing use of AI models means the value of investment information has shot up for companies holding vast amounts of proprietary financial data.
For the segment’s leading players, their exclusive datasets provide a competitive moat against potential new rivals. That competitive edge also helps to explain the appeal these financial companies have for investors seeking reliable income and dependable returns.
Still, our analysts at The Successful Investor note these companies typically shoulder high computing technology costs. That translates into modest dividends for shareholders, with dividend yields typically capped at 2 per cent.
Our search started with dividend-paying Canadian and U.S. financial information giants now leveraging mountains of data to expand already-solid earnings. From there, we applied our TSI Dividend Sustainability Rating System, awarding points to a stock based on key factors:
- one point for five years of continuous dividend payments
- two points for more than five
- two points if it has raised the payment in the past five years
- one point for management’s commitment to dividends
- one point for operating in non-cyclical industries
- one point for limited exposure to foreign currency rates and freedom from political interference
- two points for a strong balance sheet, including manageable debt and adequate cash
- two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments
- one point for being an industry leader
Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.
What we found
Our TSI Dividend Sustainability Rating System generated six stocks.
Moody’s Corp. MCO-N, headquartered in New York, provides risk assessment information, analytics tools, and other services to businesses worldwide. Notably, rather than relying on a single AI model provider, Moody’s has integrated its data and AI workflows across Anthropic’s Claude, OpenAI’s ChatGPT Enterprise, Microsoft 365 Copilot and AWS Marketplace/Amazon Quick.
TMX Group Ltd. X-T is an operator of public trading platforms, including the Toronto Stock Exchange. It also sells a wide range of financial, corporate, and trading data through its information services division, TMX Datalinx. That unit keeps adding to the Toronto-based company’s AI capabilities.
Cboe Global Markets Inc. CBOE-A, headquartered in Chicago, operates as a leading derivatives and securities exchange network. In addition, through Cboe Market Data Services, it provides real-time and historical data to banks, hedge funds, brokers, exchanges, fintechs and data vendors.
Broadridge Financial Solutions Inc. BR-N, based in Lake Success, N.Y., serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. Its clients increasingly benefit from its choice of two comprehensive AI platforms.
Intercontinental Exchange Inc. ICE-N, operates exchanges for commodities, equities, fixed income, and derivatives, including the New York Stock Exchange. The Atlanta-based company also uses AI to enhance its existing catalogue of market-focused analysis and services.
FactSet Research Systems Inc. FDS-N is a leading provider of financial data and portfolio analytics to investment firms worldwide. The Norwalk, Conn.-based company offers clients its AI Blueprint to leverage that pool of information.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.