Experian: one of the best shares to buy today

A recession-resistant stock with opportunities for rapid overseas growth makes this stock stand out as one of the best shares among its FTSE 100 peers.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Experian (LSE: EXPN) is the kind of stock that’s easily overlooked. After all, its business isn’t particularly exciting: data collection processing and generating credit ratings are probably not the things that you go to bed dreaming of, are they? Despite that, I think Experian is one of the best shares for me to buy today.

Sometimes being boring can be a good thing 

Experian is a £26bn company that generates over £6bn in revenue, which — as of the end of June — was growing that revenue at an impressive 8%.

I say impressive because that growth was generated organically rather than being made through acquisitions, an important distinction.

Should you invest £1,000 in Tesco right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Tesco made the list?

See the 6 stocks

Experian has a track record of performing well when the economy dips. For example, during the aftermath of the global financial crisis in 2008, Experian’s worst performance was a growth rate of 2%, posted in 2010. Its worst-ever year was 2015 when it still grew by 1%.

Chart, bar chart

Description automatically generated
Image source: Liberum Research

Though it’s London-listed, Experian is a global business with operations in North and Latin America, Europe, Africa, the Middle East, the UK and Asia Pacific. 

Latin American economies such as Brazil, where the financial services markets are being liberalised, present exciting growth opportunities for Experian. 

Investment bank Liberum forecasts that Latin American revenues at the company will grow by 15% in 2023, which would add two percentage points to the group’s organic growth tally.

What’s more, the company has several new products that should launch and scale over the next year. 

These include credit card and loan verification tools, and a cloud-based B2B platform that will provide customers with flexible, user-friendly and real-time data access. 

Increased use of big data will provide better market intelligence and allow for the creation of new products at Experian. For example, the companies Boost initiative in the US already collects permissioned data from 10m American consumers.

Positive outlook 

In its most recent trading update, posted on 14 July, the company forecast full-year growth of between 7% and 9% and said that organic growth in Latin America was running at 18%, and though they were seeing a slowdown in the US mortgage market, this represents just 4% of annual revenues.

However, that slowdown is being offset by strong growth in consumer marketplace products, whilst income from US consumer subscription services remains stable.

In terms of valuation, Experian is trading at around 21 times its 2023 earnings forecasts, with a dividend yield just below 2%, a discount to its US peers, for example, major US rival Equifax currently trades on 24 times earnings with a dividend yield of just 0.78%

Possible risks 

Experian’s track record suggests that it should perform well in any future recession. 

However, should the rise in energy prices and wider inflation continue unabated for an extended period, then that could damage consumer credit markets and the demand for Experian’s services.

Experian is firmly on my watchlist for my next investment because of its defensive nature, its track record of growth and the opportunity for expansion in the fast-growing Latin American markets. 

The share price is down by 23.5% year to date, versus a fall of just 3.4% for the FTSE 100, and that looks unwarranted to me. 

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Darren Sinden has no position in any of the shares mentioned. The Motley Fool UK has recommended Experian. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

Is now a good time to start investing in the stock market?

Predicting what the stock market will do in the next few weeks and months is nearly impossible. But over the…

Read more »

Close-up as a woman counts out modern British banknotes.
Investing Articles

£5,000 invested in Legal & General shares 10 years ago would have generated passive income of…

Legal & General shares are one of the highest-yielding in the FTSE 100. How much passive income could have been…

Read more »

Passive income text with pin graph chart on business table
Dividend Shares

3 world-class dividend stocks to consider for passive income

These three stocks could potentially help investors create a stable – and growing – stream of passive income in the…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

Diageo’s share price plunges 43% in 2 years! Time to consider buying the dip?

With sales falling, the Diageo share price is being hit hard. But with the shares now trading near 52-week lows,…

Read more »

Night Takeoff Of The American Space Shuttle
Investing Articles

The GGP share price skyrockets 100%+ in 2025 – Could this be the breakout stock of the year?

With the GGP share price more than doubling in four months, can Greatland Gold continue to thrive throughout the rest…

Read more »

Illustration of flames over a black background
Investing Articles

JD Sports’ share price soars 27% in just 3 weeks – is this the hottest stock to consider buying now?

The JD Sports share price is rising rapidly as management steers the business back on track. Can this upward momentum…

Read more »

Nottingham Giltbrook Exterior
Investing Articles

The Marks and Spencer share price stumbles on a cyberattack! Is it time to panic?

A disruptive cybersecurity breach has brought down Marks & Spencer’s online store, sending the share price tumbling. Should investors be…

Read more »

piggy bank, searching with binoculars
Investing Articles

Down 32%, this FTSE stock now has a 12% dividend yield!

With one of the highest yields in the FTSE 350, is this emerging markets investment firm a screaming passive income…

Read more »