Not every day you see a serial compounder and card-carrying dividend aristocrat trading like a busted bank.
Enter Wolters Kluwer, the Netherlands-based professional information giant with dominant franchises in healthcare, tax advisory, legal and more.
The group is working overtime to persuade investors that artificial intelligence is a tailwind, not a guillotine. Management insists it seized the moment early. Two-thirds of revenues, it says, are already tied to AI-enabled services.
Investors remain unimpressed. Market value has been cut by roughly two-thirds in twelve months. You would think revenues had evaporated. They have not.
The latest annual results show no calamity. Revenue keeps growing near its ten-year average clip. Margins hit a record high — awkward evidence for those who argue AI will hollow out information providers. If anything, automation seems to fatten margins rather than starve them.
From 2016 to 2025, revenue rose from €4.3bn to €6.2bn. Pre-acquisition free cash flow nearly doubled, from €703mn to almost €1.4bn. The comfortably covered dividend quadrupled. Shares outstanding fell by almost a quarter. Earnings per share tripled. All the while, return on equity stayed in the stratosphere, with limited reliance on leverage.
That is a fine record for a mature company. It softens, though does not erase, the sting of aggressive buybacks executed at more than twenty-five times earnings during the post-pandemic euphoria. Expensive mistakes are still mistakes, though this one is modest by comparison to Moderna’s.
Today the stock changes hands at roughly ten times cash earnings. For a high-return, entrenched operator long treated as untouchable, that is a basement multiple. The last time it traded this low was 2009, in the thick of the subprime crisis, when the world looked as if it might end.
This is not the first technological scare. When cloud computing swept through enterprise software, shareholders already feared Wolters’ franchise would evaporate. Instead, the company used the shift to accelerate profit growth. If anything, it cemented its standing. AI may yet prove the same gift in disguise.