Dun & Bradstreet CorporationDNB

Morningstar Rating

Stock Research and Analysis

by Bradley Meeks

Dun and Bradstreet benefits from an entrenched market position, network effects, and scale advantages that help protect its profitability. Although top-line growth could be tough to come by in the near term, the company returns most of its ample free Read more

Bulls Say

Free cash flow has averaged 20% of sales during the past three years, increasing steadily from 12.5% in 2001.

D&B benefits from a network effect. Businesses seek to be included in D&B's database because they know that other firms rely on D&B's information to extend credit. As each new firm is added, the size of its database, and therefore the value to all its customers, grows.

D&B has successfully converted most of its risk-management customers to a subscription model, providing increasing revenues from up-selling opportunities and also improving the consistency of its revenue. Read more

Bears Say

The company has an underfunded pension plan of a half billion dollars. The company could end up using its cash flow to supplement its pension plan if the funding gap persists.

D&B has incurred restructuring charges annually for the past 11 years, which could be viewed as a permanent part of the firm's cost structure. Charges due to divestitures, asset sales, and terminations obscure true operating results and performance.

The Internet Solutions and Sales and Marketing business lines are economically sensitive and make up close to 30% of total sales. As corporate budgets come under scrutiny, these discretionary services can be easier to forego. Read more

Strategy

The company's "Blueprint for Growth" strategy has largely been unchanged since 2000. In detail, the strategy includes growing revenue organically, pursuing joint venture opportunities in emerging markets, Read more

Management

D&B is led by Steven Alesio who has served as chairman and CEO since January 2005. Alesio has been with D&B for the better part of eight years and helped transition the company after it spun off Moody's MCO in 2000. Prior to joining D&B, Read more

Profile

Dun and Bradstreet has been a global provider of information and risk management solutions to customers and businesses for over 167 years. The company's commercial database Read more

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