Relx PLC
🇬🇧 REL.LSE · London · GB00B2B0DG97
Technology
GBX 2525.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
22.5
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 2525.00 ÷ 112.02 = 22.5
TTM period through: 2025-12-31
Forward P/E (estimated): 16.1
Based on analyst estimates
Yield (Fwd)
2.69%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.71%
Net Debt/EBITDA (TTM)
1.9x
Latest quarter: 3.8x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 3.8x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
60.7%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 57.2%
Cash Flow Payout (TTM): 41.1%
FCF Coverage (TTM): 2.42x
ROE
70.5%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
14.0x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Relx is a world-class data analytics provider boasting an exceptional economic moat, massive free cash flow, and reliable dividend growth. However, with a P/E of 22.5 and a dividend yield of 2.7%, the current valuation offers limited upside and fails to meet conservative income targets. Existing shareholders should maintain positions given the outstanding business quality and secure cash flows, but new investors should wait for a more meaningful market correction before initiating exposure.
Sector Context
Relx PLC is a global provider of information-based analytics and decision tools for professional and business customers, operating heavily in scientific, technical, medical, and legal sectors. While classified as Technology—a sector generally avoided in this strategy due to rapid obsolescence—Relx functions more like a defensive data monopoly with highly predictable, subscription-based recurring revenue.
Temporary Opportunity Identified
Market concerns regarding generative AI potentially disrupting traditional legal and scientific data research models, causing periodic share price volatility.
📊 Strategy Analysis
- • Exceptional business fundamentals characterized by a 70.5% ROE and 38.9% EBITDA margin, supported by a wide economic moat in proprietary data and analytics.
- • The dividend is highly secure despite elevated accounting payout ratios, evidenced by a strong Free Cash Flow coverage of 2.42x and a cash flow payout of just 41.1%.
- • Conservative debt profile with Net Debt/EBITDA at 1.93x, well below the strategy's 3.0x maximum limit, demonstrating strong financial stability.
⚠ What to Watch
- • Valuation remains elevated with a TTM P/E of 22.54x, pricing the stock at 2525 GBX which is well above our calculated monopoly fair value upper bound of 2016 GBX.
- • The current dividend yield of 2.71% falls strictly below the strategy's 3% minimum requirement for optimal income generation.
- • Ongoing narrative risk and market volatility stemming from the emergence of generative AI tools, which investors fear could disrupt traditional legal and data service models.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.