Four UK data companies to buy now

Data has become the world’s foremost growth industry. Every day, the world creates 2.5 quintillion bytes of data, and the pace of creation is only accelerating. The sheer scale of data creation poses a challenge for the world in 2025. It used to be said that data was the new gold. Today, data is a commodity almost as common as sand. The desire and hunger for data has even sparked a rush for synthetic data – data created by artificial intelligence (AI), with no real-world backing, to help enhance models.

In some respects, this has become a problem for the world. So much data is being made all the time that we need a constant supply of new data centres and power sources to develop, store and analyse it. It’s also becoming harder to determine which data is important and which should be disregarded as noise. In this world of abundance, clarity is becoming more critical than ever before. The companies that can analyse the huge volumes of data to produce comprehensive reports, encompassing both mass-market data and bespoke, unique datasets, will have an edge.

The big data companies

Despite London’s reputation as an investment backwater for technology companies, the London Stock Exchange actually hosts some of the most exciting and forward-thinking data companies in the world. One of those is the parent company of the London Stock Exchange, now called LSEG (LSE: LSEG). Over the past decade, LSEG has created one of the world’s most critical financial-data companies. Revenue from data analysis and data services now accounts for the bulk of the group’s income; revenue from trading on the exchange is virtually a footnote in the company accounts.

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Three companies dominate the financial-market data sector: Bloomberg, LSEG Data & Analytics, and S&P Global Market Intelligence. Investment banks and traders always require up-to-date market data. Building the infrastructure to deliver the data to all of the world’s major cities, 24 hours a day, seven days a week, has been an enormous undertaking for the companies operating in this sector. In most cases, they have built their market positions over several decades, and displacing them is impossible. They are also at the forefront of data creation, so any new data is automatically added to datasets. This gives them a substantial competitive advantage over new entrants, or competitors trying to build market share.

LSEG now owns one of the world’s most extensive and valuable financial datasets, according to analysts at investment bank Jefferies. The analysts believe the data-feed market, in which the company has such a significant market share, has a total addressable market size of around £20 billion a year. A report published by broker TP Icap at the beginning of 2024 suggested that global spending on financial-market data and use hit $42 billion in 2023, up 12.4% year on year. A significant driver of the increase in demand for data has been the rise of AI and advanced analytical tools. Financial institutions have rushed to incorporate generative AI and other AI tools across their areas of operation, and these models require huge datasets in order to extract intelligence, accurately assess risk and derive analytical conclusions.

The most valuable dataset LSEG owns is its “tick-history” data. This is a 20+ petabyte repository (1,000,000 gigabyte, or enough to store 20 billion high-quality photos) of financial-market trading data on a tick-by-tick basis – that’s every single move an asset such as a stock or a bond makes. LSEG data is captured every nanosecond at the data-centre level from hundreds of exchanges and asset classes around the world. LSEG’s data set was given a substantial boost in 2021 with the $27 billion acquisition of Refinitiv, and then in 2022 it forged a ten-year multibillion-dollar partnership with Microsoft. That deal was a strategic masterstroke. LSEG has the data, but it does not have the infrastructure to deliver it to clients. It’s relatively straightforward to create a bespoke and deep dataset, especially when, like LSEG, you own exchanges that create the data in the first place. The expensive part is building the infrastructure to store and distribute the data. That’s where Microsoft comes in.

Alphabet, Amazon, Meta and Microsoft are the only companies in the world with the scale and resources to build the infrastructure required to power the world’s data infrastructure. In 2024, these four companies spent $200 billion, up 45% on 2023. In 2025, Microsoft has said it will spend $80 billion on data centres and AI infrastructure. For the most part, these will not be profitable investments in themselves, but the technology firms can afford the outlay as they fight for market share. LSEG’s partnership with Microsoft enables the former to leverage the latter’s scale in cloud and cloud infrastructure to offer its clients access to data around the world at a relatively low cost. The company can do much more with its data for less and doesn’t need to make the heavy capital spending commitments it would otherwise have to if it was building its own data centres.

This partnership has only enhanced LSEG’s position in the market for financial data. By leveraging the partnership with Microsoft, it has strengthened its ability to outsource data management for clients and the value of its offering for customers. Hedge funds anywhere in the world can, for example, now make use of LSEG’s tick-by-tick data to train trading models using AI and advanced data analysis.

The data companies drawing clarity from noise

LSEG is probably one of the best examples of a company that’s leveraging a unique data set in a highly consolidated market. It’s also a great example of why a small number of companies are becoming increasingly valuable gatekeepers of precious datasets that can’t be found elsewhere in a world awash with data. But LSEG’s advantage does not stop there. The company also owns the FTSE Russell Benchmarks and Indices business, which, using the company’s own data, is responsible for compiling the FTSE and Russell indices. Hundreds of active and passive funds worldwide use these to benchmark performance and manage portfolios, all of which generate a fee for LSEG.

One of the group’s competitors in this market is S&P Global. Mainly known for its credit-rating business, S&P Global has a market intelligence division, a low-price information service offering, and an indices division, which compiles the S&P indices, benchmarks widely used by passive and active funds. Once again, these indices and credit ratings are unique datasets that companies must pay a fee to acquire and use. S&P’s weakness is its credit-rating business, which, while unique, is highly cyclical. Companies tend to issue more bonds (every bond issued requires a credit rating) when interest rates are low or falling and hold fire when the cost of borrowing is more expensive.

Experian (LSE: EXPN) and LSEG have a lot in common. Both are sector leaders, and both hold vast pools of data that do not exist elsewhere. Experian is the world’s leading provider of information and credit-bureau services, aggregating financial data, which it uses to help customers manage and price risk; make better, faster decisions; gain access to credit; verify identity and reduce fraud. Unlike LSEG, Experian offers consumer products as well as its core business-to-business offering. In fact, of the big three credit-bureau providers – Experian, TransUnion and Equifax – Experian is the only provider to offer a scaled consumer-focused product. That now accounts for 27% of revenue and it has almost 20 million subscribers to its products and nearly 200 million signed up for its free service.

The consumer offering has several parts. The main one is the ability to review and analyse credit scores, and there are also tools to improve online security. Experian is also working in the US to build a payment business and partnerships with insurers. These tools are not unique to Experian, but as with LSEG, it’s the ability to bring together multiple datasets and draw clarity from the noise that gives Experian an edge. And like LSEG, Experian has built out its cloud data offering. Management has said that within the next two years the group’s shift to the cloud will be 85%-90% complete. This is expected to generate an uplift in growth as software is delivered through the cloud and clients move onto the group’s cloud portal. The growth in the consumer business, combined with the shift to the cloud and consequently reduced capital spending could drive Experian’s earnings before interest and tax (Ebit) up by around 36% by fiscal 2027, according to Panmure Liberum. Based on these targets, the stock is trading on a 2026 price-to-earnings (p/e) multiple of 22.6 and a free cash flow yield of 4.7%.

AI is a game changer for data companies

In big data and analytics, Relx (LSE: REL) is often overlooked, although that is starting to change. Relx is one of the world’s largest publishers of scientific articles and legal documents. In 2023, it published 17% of all scientific journals and articles. ScienceDirect, the world’s largest platform dedicated to peer-reviewed primary scientific and medical research, hosts more than 21 million items. The group’s LexisNexis legal platform hosts over 138 billion legal and news documents and records, with 2.2 million added daily. These huge datasets give the firm a vast and growing competitive advantage in the fields of legal and scientific research.

It’s also home to a burgeoning risk-analysis business, LexisNexis Risk Solutions, which in 2023 became the largest division by revenue. Some 86% of new US vehicle-insurance policies issued to consumers in 2023 used Relx’s risk-analysis products, while the LexisNexis Digital Identity Network is used by hundreds of thousands of websites daily and analyses hundreds of millions of transactions every day to stop fraud. In 2018, the group added to its arsenal of tools by acquiring ThreatMetrix. This Silicon Valley firm links online identities to digital devices and is aimed at preventing fraud in the banking industry.

Around 84% of the group’s revenue now comes from digital products, with 54% generated from recurring subscriptions, with future growth planned. Management has recently rolled out the Lexis+ AI platform for legal users, combining the group’s massive data archive of legal documents with AI technology to streamline and enhance the research and legal-document drafting process for users.

AI could be a game-changer for Relx. Annually, the company spends $1.7 billion on technology, and it claims to be one of the biggest spenders on AI in the UK. Bank of America recently listed the business as one of the 25 companies in the world that’s set to benefit most from AI over the coming years. AI models are only as good as the data they’re trained on, and if there’s one thing Relx has, it’s high-quality data. The company has been experimenting with AI tools for the best part of two decades, and the next generation of tools and enhanced processing capabilities could help the business expand its customer offering. Indeed, alongside Lexis+ AI, it has launched ClinicalKey AI, designed to help speed up and improve decision-making by clinicians. Shares in Relx have been on a tear over the past year, up 20% over the last 12 months and nearly 80% since the beginning of the year. They are now trading on a forward p/e of about 33 on Berenberg’s estimates, falling to 30 by 2026.

A small data company with big potential

Relx is one of the largest companies in the FTSE 100. GlobalData (LSE: DATA), with a market capitalisation of just £1.5 billion, is tiny by comparison, but the group has huge potential. GlobalData provides business information in the form of high-quality proprietary data, analytics and insights to clients in multiple sectors. It has been growing through a combination of organic and bolt-on growth, with management targeting six deals per year. The group completed three deals in the second half of 2024: LinkUp, Celent and Deallus. LinkUp is the global leader in providing accurate, real-time, and predictive job-market data. Celent is a research and advisory company. Deallus is the most interesting of the three. The two-decades-old company owns a valuable trove of data in the oncology, neuroscience, vaccines, rare diseases, cell and gene, and immunology sectors. GlobalData has said that when combined with GlobalData Healthcare it will create the “deepest and broadest” archive of life-sciences data, insights and expertise in the market today.

Admittedly, GlobalData is a risky proposition. LSEG, RELX and Experian have a competitive edge because they are the biggest in their respective sectors with the deepest and most desired datasets. GlobalData is still trying to acquire a competitive edge, and its size means it is at risk of being overtaken by larger peers and pushed out of its markets. Still, while the company might not be as established as its larger peers, investors could be well-rewarded if management gets the growth strategy right over the coming years. Management has laid out a five-year revenue target of £500 million. According to the latest trading update, the group is expected to record revenue of £287 million for 2024. Acquisitions completed during the year are expected to contribute £42 million to the top line in 2025. Analysts at Berenberg have pencilled in organic revenue growth of 5%-8% in 2025, with mergers and acquisitions expected to top up growth. GlobalData has plenty of firepower to pursue further deals. It ended the first half of 2024 with £188 million in net cash and is expected to generate cash of £46 million in 2025 and £73 million in 2026 (pre-deals). Berenberg has pencilled in an earnings before interest, tax, depreciation and amortisation (Ebitda) margin of 41% for 2024.

If the company can execute its growth objectives over the next few years, it certainly looks cheap. According to estimates compiled by Berenberg and Panmure Liberium, the stock is trading on a 2026 forward p/e multiple of 18.4 and a forward free cash flow yield of 6.2%.

When it comes to data, it's quality that matters

It’s always a challenge to determine how much a company is worth and how much investors should be willing to pay to buy into the growth story. It’s even harder to analyse the potential worth of something intangible, such as data. Many factors determine the value of a particular dataset. Analysts consider factors such as the ability to recreate the dataset, the bespoke and proprietary nature of the data, and the potential monetary value to be derived from analysing and manipulating it.

The development of machine learning and AI has dramatically improved how companies use data and the speed at which data can be mined to produce results. These developments have only increased the value of datasets, especially large proprietary datasets used to train AI and machine-learning models. But at the same time, the speed at which new data is being created risks undermining the companies that can’t stay on top, meaning smaller, sub-scale players that don’t have access to proprietary first-party data are at greater risk than ever before.

Relx, LSEG, Experian and, to a lesser extent, GlobalData, are homegrown British champions that have all the qualities needed to maintain a competitive advantage in the global data market. They all have existing competitive advantages and the scale required to maintain the advantage in a data-dependent world swamped with increasing amounts of misinformation.

These companies might not appear cheap on a traditional p/e basis, but it’s the quality of their data that really matters. In the case of Experian, LSEG and Relx, their existing datasets and capabilities would be incredibly difficult to replicate. That suggests the shares should command a substantial premium to the rest of the wider market, especially considering the growth opportunity presented by AI and the increased global reach of these businesses as they move to a cloud-based service.

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