MCOMoody's Corporation

Moody's assigns credit ratings and sells analytics — its income depends on how much the world borrows.

The ratings arm assesses the credit quality of issuers and bond issues. Revenue tracks issuance volume: when money is cheap companies borrow heavily and pay for ratings; when it is expensive the market freezes. That makes the business cyclical but with a very high barrier to entry — the market is divided among a few agencies.

The second part is analytics: company data, risk models and software for banks and insurers. It sells by subscription, grows steadily and does not depend on the issuance market, so its share is deliberately being grown.

The industry's reputational risk is known from the 2008 crisis and has not gone away: the agency is paid by those it rates, and the conflict of interest is built into the model. Moody's pays a dividend and buys back stock actively.