Moody's Corporation MCO

The business

Two halves that get talked about as one. Moody's Investors Service assigns credit ratings and gets paid a fee, usually basis points on the deal size, when a bond is issued. Moody's Analytics sells subscriptions: research, economic models, know-your-customer screening, insurance and banking risk software.

The ratings half has one of the best competitive positions in any industry, because a company issuing debt needs two ratings and there are effectively two firms that count. It is also entirely dependent on issuance volume, which is the credit cycle. The analytics half is the recurring revenue that was supposed to smooth that out.