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Reliable Relx is a portfolio essential

Relx logo and branding on a banner in a building

Very few British companies tick all the requirements of the Investor’s Champion portfolio: decent growth, strong cash flow, impressive return on investment. Relx goes above and beyond these requirements and only faces a small number of challenges to its continued growth. We discuss the pros and cons in our in-depth analysis of the company and explain why Relx is a portfolio essential.

When it comes to quality and consistency, few British companies compare to Relx (LON: REL). The numbers speak for themselves. In the last five years, revenues at the media and publishing group have risen at an average pace of 5% and margins have expanded, sending net profits up over 8% every year. In the same period, the group has generated an average return on capital employed of 22% and converted more than 100% of net profits into free cash.

That quality is reflected in the group’s reporting. There’s no hidden agenda with Relx, management even roll pension costs into the net debt figure – few companies have that degree of transparency.

Relx’s consistency is largely thanks to the its value of its products, particularly those in its science and legal divisions. Relx publishes leading scientific journals and owns the UK’s biggest catalogue of legal documents. If you are a scientist, lawyer or university student, you are likely to use Relx products…

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