With last Friday's announcement that News Corp (NYSE: NWS) is seeking a buyer for the Dow Jones Index business, we got to thinking. Does slapping a name on an index represent a profitable way for a company to make money? More importantly, do the companies involved in the index business represent good opportunities for investors?

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It's not yet apparent who the winner will be for the Dow Jones indexes, which include the transports, the oldest of all U.S. stock indexes, the utilities and a host of others including the venerable Dow Jones Industrial Average. But what is clear is that they will be getting a profitable business that produces steady income for years and years. (Learn about the history of the Dow in our article Why The Dow Matters.)

Some potential suitors for the Dow Jones indexes include Thompson Reuters (NYSE: TRI), privately held Bloomberg L.P., the Financial Times (the "FT" behind London's FTSE 100) and two companies that we're going to take a look at here: MSCI (NYSE: MXB) and McGraw-Hill's (NYSE: MHP) Standard & Poor's unit.

A Name Your Already Know
McGraw-Hill Cos.
(NYSE: MHP) Forward P/E: 12, 52-Week Change: -26%
If McGraw-Hill is the winner for the Dow Jones index business, its Standard & Poor's unit will be the driving force behind the two most closely watched equity indexes in the U.S. That could be good news for McGraw-Hill shareholders who have seen their holdings tumble by nearly 26% in the past 52 weeks. Even the recent rally has left behind McGraw-Hill as the stock is down nearly 5% in the past three months while its own S&P 500 is up about 15% in the same time frame.

McGraw-Hill's index business and the profits generated by the Standard & Poor's ratings business have probably helped the company weather a terrible environment for media and publishing firms. Not only is McGraw-Hill a giant in the world of academic textbook publishing, it also publishes "Business Week," an 80-year old financial weekly. McGraw-Hill is looking to sell "Business Week", but that sale isn't likely to prove rewarding for shareholders. As advertising revenues have tumbled, so has the magazine's value and some press reports have said McGraw-Hill may only fetch $1 for its troubles. (Lear about rating agencies in our article A Brief History of Credit Rating Agencies.)

McGraw-Hill could use a catalyst to juice the shares and the bottom line. The company reported a 22.7% drop in second-quarter profits at the end of July due to a variety of charges and sales that fell 12.4%. McGraw-Hill shares currently yield 3%, but that may not be enough to weather the ups and downs of the publishing business in this environment.

A Unique Play On Global Investing
MSCI Inc. (NYSE: MXB) Forward P/E: 24, 52-Week Change: 1%
It seems like everyone is talking about emerging markets and international investing these days and MSCI is a unique way to get some exposure to global indexes without buying a foreign stock. Not that foreign stocks are bad, but MSCI is starting to look really good. The shares are up about 38% in the past three months.

MSCI doesn't get a lot of coverage from Wall Street analysts (only seven follow the company), which is odd considering most foreign stocks owned by U.S. money managers are linked to an MSCI benchmark index. This is even more strange when you consider that MSCI has been around since the 1960s and used to be a unit of Morgan Stanley (NYSE: MS).

MSCI's footprint on global investing is huge. Twenty-six percent of all global assets are benchmarked to an MSCI index, trailing only S&P's 29% share. The stock currently trades for around $30 and some analysts believe that it could reach the high 30s or low 40s in a year.

About 55% of MSCI's sales come from the fees money managers pay to subscribe to the company's index services and MSCI has already raised prices twice this year, showing it has some pricing power.

The Bottom Line: Go Global
Even if McGraw Hill is the winner for the Dow Jones index prize, it may be a while before that acquisition pays dividends for shareholders. On the other hand, MSCI looks like a winning bet with or without any additions to its strong index business.

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