RELX PLC
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
GBX 7,395.00 | Zzvz | Tqzmvltdz |
RELX Remains Robust Through Tough Times
Business Strategy and Outlook
Over the past decade, RELX has undergone wholesale changes to the structure of the company, taking its exposure to electronic-format businesses from 35% to more than double this figure. This change was achieved primarily through a series of targeted acquisitions and disposals, such as that of data aggregator ChoicePoint in early 2008, which subsequently burdened the company with significant debt-service costs. Despite these challenges, the company has managed to significantly drive operating margin growth with the improved business mix. Since 2005, operating margins have expanded by close to 50%. This has also been reflected in returns on invested capital, which have increased on an adjusted basis from close to 8% in 2009 to more than 13% in 2019, against a weighted average cost of capital of just 8.3%.