FTSE 100 incumbent RELX (LSE: REL) is one inventory I’d love to purchase when I’ve some free funds to take a position.

Let me clarify why!

Knowledge king

I’d agree with these keen to argue that RELX most likely isn’t a family title. It doesn’t have the identical pull as different fashionable manufacturers. Nonetheless, it has the hallmarks of a smashing firm that gives a key product to many companies the world over.

A pacesetter in information and analytics companies, it’s famend for the high-quality actionable data it supplies to professionals the world over. A first-rate instance of that is its LexisNexis database utilized by the authorized career. I’ve used this personally in a earlier life. For context, it accommodates 138bn authorized and information paperwork for professionals within the trade to name upon.

RELX shares have had a incredible 12-month interval, up 31%. Presently final 12 months, they had been buying and selling for two,788p, in comparison with present ranges of three,667p.

Why I like RELX shares

In addition to RELX’s huge presence, huge sector protection, and popularity for high-quality data, which make it an trade chief, there are different points I like too.

One of many largest ones is the way in which it makes cash. Its recurring income mannequin, whereby subscribers pay a month-to-month charge to entry the knowledge they want, means revenues can develop and visibility is great from an investor perspective.

This similar mannequin has meant RELX has a great monitor report of efficiency. For instance, I can see income and revenue have grown annually for the previous 4 years. Nonetheless, I do perceive that the previous isn’t a assure of the longer term.

Talking of the longer term, I’m actually excited by RELX’s use of synthetic intelligence (AI). It’s value noting that RELX confirmed it hasn’t just lately jumped onto the bandwagon, however has been incorporating AI into its instruments for some time. Nonetheless, now, it has created a selected suite of merchandise constructed on AI to assist enhance efficiency and its providing.

Lastly, a dividend yield of 1.65% sweetens the funding case. Nonetheless, I do perceive that dividends are by no means assured.

Dangers to notice

Everybody loves a cut price, let’s be sincere. RELX shares don’t fall into that class, as they commerce on a price-to-earnings ratio of near 30. Maybe development is priced in? May the shares take successful if earnings fall? I’ll control this.

The opposite threat is that of the AI revolution. Competitors from different tech corporations on this house may dent RELX. Plus, AI could possibly be a flash within the pan, and actual world purposes could possibly be years away, so I’ll be watching intently.

Relating to RELX, I can’t assist considering of considered one of my investing position fashions in Warren Buffett. To paraphrase the Sage of Omaha, I’m joyful to pay a good price for an exquisite firm.

In my opinion, the previous has been good, and the longer term could possibly be much more thrilling for RELX.