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Using predictive analytics to measure investor response to changes in capital expenditure strategies
24 February 2022
Corporate issuers reevaluate their capital allocation
strategies to ensure alignment between capital expenditures,
investor returns and future strategy considerations.
The global pandemic has caused significant changes to business
models, prompting issuers to reevaluate their capital allocation
strategies, thus creating a unique opportunity to ensure there is
alignment between capital expenditures, investor returns and future
strategy considerations.
Predictive Analytics: Issuers are increasingly
using predictive analytics to measure investor response to material
changes in capital allocation strategies. IHS Markit Situational
Analytics empowers teams with net and investor-specific views of
risk and opportunity linked with changes to dividends, share
repurchases, total payout ratios, leverage, and M&A.
See how a Large Cap North American company weighed the predicted
risk of suspending their dividend.
Case Study: Dividend Suspension
Benchmarking & Trend Analysis: Data-based
validation of capital allocation strategies are quickly becoming a
standard annual exercise for best-in-class teams. IHS Markit
collaborates with IROs, Treasurers, CFOs, and Boards of Directors
to provide a clear view of competitive benchmarks, as well as
industry and investor trends.
Scenario Planning: For many teams, scenario
forecasting requires various inputs across the balance sheet to
weigh options regarding strategies that best align with the goals
of the business and will have an optimized market response.
Read about how a client experiencing growth in their cash flow
made the decision between buybacks and a dividend issuance for an
optimized shareholder return policy.
Case Study: Dividend vs. Buyback
Data Science: For Dividend-focused strategy,
IHS Markit clients benefit from IHS Markit's Dividend Forecasting
service, which provides global forecasting powered by data science
for over 28,000 global stocks. This gives corporate issuers a clear
view of forecasted competitive dividend strategies as they compete
for investor capital.
ESG: With increasing focus on climate change
and regulatory trends, global teams in highly impacted sectors are
building in ESG considerations as part of their annual capital
allocation exercise. These analyses are particularly relevant for
companies going through business shifts seeking to lower
environmental impact and enhance sustainability. These issuers are
partnering with IHS Markit to understand the potential risk to
old-guard investor bases and the opportunity to attract active and
passive capital focused on these transitional businesses.
Start a Conversation with Us
We'd welcome the opportunity to discuss how our solutions can
benefit your IR strategy and program. Please contact your IHS
Markit Client Advisor for more information, or
contact us today You can also visit us at
Investor Relations Solutions.
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
