Moody’s Corporation (MCO) Benefits from Near-Monopoly Status in Global Credit Ratings

Ironvine Capital Partners, an investment management company, released its Q4 2025 investor letter. A copy of the letter can be downloaded here. Ironvine Capital Partners emphasized in its latest investor letter that long-term equity returns are ultimately driven by underlying earnings growth, noting that businesses held across its portfolios increased earnings between 12% and 16% in 2025, while holdings have compounded profits at roughly 15%–18% annually over the past nine years. The firm expects another year of mid-teens earnings growth across its companies in 2026, supported by durable competitive advantages, reinvestment opportunities, and structural industry tailwinds. Performance for the Ironvine Concentrated Equity Composite returned 11.27% in 2025, compared with 17.88% for the S&P 500 Index, while the Ironvine Core Equity Composite gained 9.68% during the year. The letter highlighted several major portfolio holdings benefiting from trends such as cloud computing expansion, aerospace maintenance demand, datacenter and semiconductor growth tied to artificial intelligence, resilient credit markets, the continued digitization of payments, and the global need for enterprise software and risk-management services. Despite acknowledging uncertainties ranging from regulatory developments to cyclical industry conditions, the firm remains confident that owning durable, high-quality businesses with strong reinvestment opportunities can generate double-digit long-term returns even if market valuations moderate. Please review the Portfolio’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Ironvine Capital Partners highlighted stocks like Moody’s Corporation (NYSE:MCO). Moody’s Corporation (NYSE:MCO) provides credit ratings, research, and risk analysis tools that help investors and institutions assess financial risk and market conditions. The one-month return of Moody’s Corporation (NYSE:MCO) was -2.68% while its shares traded between $378.71 and $546.88 over the last 52 weeks. On March 19, 2026, Moody’s Corporation (NYSE:MCO) stock closed at approximately $435.80 per share, with a market capitalization of about $77.57 billion.
Ironvine Capital Partners stated the following regarding Moody’s Corporation (NYSE:MCO) in its Q4 2025 investor letter:
"Moody’s Corporation (NYSE:MCO) operate near monopolies in the assignment of credit ratings on bonds issued by businesses and governments across the world. The strength of these franchises dates to their status as “Recognized” by U.S. and European lawmakers and the resulting guidelines of nearly every asset manager, insurance company, pension fund, etc. requiring that almost all bond purchases carry ratings from Moody’s and S&P for the purposes of measuring portfolio risks. Simply put, if a business or government chooses not to obtain a Moody’s and/or S&P rating when issuing new debt, their borrowing costs go up. Moody’s and S&P ratings are the industry standard, 3 an enviable competitive position that combines brand strength with regulatory mire. The resulting position stymies new entry and would discourage even those with a blank check and infinite time from trying to compete with them head on. Debt issuance can be episodic over short periods of time but ultimately grows as a function of GDP. Moody’s and S&P are endowed with a preferred return on this growth, requiring effectively no capital to capture it. As a result, both companies generate strong cash flow, the bulk of which is used to repurchase shares and distribute to shareholders as dividends..." (Click here to read the full text).