One of the major risks behind the Financial division is increased regulation from governments and governmental organizations throughout the world concerning the role of rating agencies and their operations.
The company has managed to increase Return on Equity from 28.20% in 2002 to 45.20% in 2011. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.
Currently McGraw-Hill is fairly valued at 16.30 times earnings, has a sustainable dividend payout and yields 2.10%. I would consider adding to my position in the stock on dips below $40.
Full Disclosure: Long MHP