Relx outperforms: should you buy this FTSE 100 success story?
Relx, a fast-growing risk management and analytics group is benefiting from artificial intelligence


Investment portfolios benefit from adding companies with long records of profitable growth and rising dividends; if these firms possess databases of proprietary information that can benefit from the application of artificial intelligence (AI), so much the better. Enter RELX (LSE: REL), a FTSE 100 company worth £66 billion. It supplies global customers in a diverse set of professions and businesses with information-based analytics and decision-making tools. It is the largest player in an industry where scale is important and its growing use of analytics and decision-making tools has increased its organic growth rate.
RELX has four divisions: risk (34.2% of revenue), scientific, technical and medical (ST&M, 33.4%), legal (20.2%) and exhibitions (12.2%). Relx serves customers in over 180 countries. The risk segment uses advanced technology and algorithms to analyse public and industry-specific content to predict risks, detect fraud and enhance efficiency. Risk’s customers include 84% of the Fortune 500 companies, nine of the world’s top 10 banks and 21 of the world’s top 25 insurance companies. ST&M includes 2,900 journals, ScienceDirect (the world’s largest platform of peer-reviewed scientific and medical research with over 21 million pieces of content) and SciVal – a web-based analytics tool providing insights into the research performance of over 24,000 academic, industry and government research institutes.
Legal includes the well-known LexisNexis database with more than 138 billion legal, court and patent documents, to which over 2.2 million new documents are added daily. It also includes PatentSight, which rates the innovative strength of 152 million patents from 100 countries. Exhibitions organised 286 face-to-face exhibitions in 2023 with over six million visitors and serves 42 industry sectors in 25 countries. RELX already has 10 products on the market using generative AI to help professional customers. These include Lexis+AI for legal professionals, ClinicalKey AI for clinicians and AI Assist for HR professionals. Lexis+AI for lawyers, for example, features conversational search, intelligent legal drafting, insightful summarising and analysis of documents. All these activities are supported by state-of-the-art encryption and privacy technology to keep sensitive data secure.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Should you invest in Relx?
RELX was founded in 1903 and has undergone a complete transformation over the last 24 years. In 2000, 64% of revenue came from printed products and 22% from electronic ones. Now print comprises 5% of sales and electronic offerings 83%. In 2023 the other 12% was accounted for by face-to-face revenue (exhibitions). Relx has also moved on from its mainly European roots (the merger of Reed and Elsevier) by growing its North American revenue to 59% of the total. Europe comprises 21% and other countries 20%. The majority of overall revenue now comes from subscriptions or long-term contracts, which greatly reduces volatility. The company has a wide “moat” (an enduring competitive advantage) based on its intangible assets (such as proprietary databases) and switching costs: it would be expensive for clients to switch to a rival. The moat, coupled with the recurring revenue base, reduces cyclicality and gives a high degree of certainty and predictability to future growth.
RELX’s revenue and profits dipped during Covid, but both have risen steadily in the last few years. Revenue is up from £7.1 billion in 2020 to £9.2 billion in 2023, with adjusted operating profit jumping from £2.08 billion to £3.03 billion. The dividend was increased from 45.7p to 58.8p over the same period. CEO Erik Engstrom has led the company since 2009 and it has grown mainly organically, with small bolt-on acquisitions. There has been an upward trend in both operating margin and return on invested capital over the last few years.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Highly qualified (BSc PhD CPhys FInstP MIoD) expert in R&D management, business improvement and investment analysis, Dr Mike Tubbs worked for decades on the 'inside' of corporate giants such as Xerox, Battelle and Lucas. Working in the research and development departments, he learnt what became the key to his investing; knowledge which gave him a unique perspective on the stock markets.
Dr Tubbs went on to create the R&D Scorecard which was presented annually to the Department of Trade & Industry and the European Commission. It was a guide for European businesses on how to improve prospects using correctly applied research and development.
He has been a contributor to MoneyWeek for many years, with a particular focus on R&D-driven growth companies.
-
Is it time to ride the recovery in emerging markets?
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeek
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
What is the Enterprise Investment Scheme and should you have one?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
The alcohol industry is suffering as consumers sober up – is it still worth investing in the sector?
Changing consumer tastes are rocking the alcohol industry, but the best players are adapting their strategies. Buy them while their shares are still cheap
-
A strange calm in credit
Corporate bond markets remain remarkably relaxed, with yields that offer little compensation for risks
-
The City's big bet on green finance fails to pay out
Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?
What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
-
Six top investment trusts for smaller stocks
Liquidity constraints mean investment trusts are best placed to seize the juiciest opportunities
-
Could colour diamonds add a sparkle to your portfolio?
Diamonds of various shades never go out of fashion, says Chris Carter