From time to time, companies set up one or more of their divisions or subsidiaries as an independent company, then hand out shares in that company to their own shareholders, as a special dividend or “spinoff”.

Many investors seem to view spinoffs as a nuisance, because they leave you with a tiny holding in a stock you didn’t choose and that you know little about. They may dump them as soon as they get a chance. On the other hand, a number of studies have shown that after an initial adjustment period of a few months, spinoffs tend to outperform groups of comparable stocks for several years.

MCGRAW-HILL COMPANIES INC. (New York symbol MHP; www.mcgraw-hill.com) will soon split into two separate, publicly traded companies.

One of these new firms, McGraw-Hill Financial, will sell financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market- research firm. Right now, this division supplies 60% of McGraw-Hill’s total revenue.

The other company, McGraw-Hill Education Inc., will publish textbooks for schools and colleges. It sells its products in 28 countries and 65 languages.

Investors will receive a special dividend of one common share of McGraw-Hill Education (New York symbol MHED) for every three McGraw-Hill shares they own. This will be a tax-deferred transaction: shareholders will not have to pay capital gains taxes until they sell their new shares. After the distribution, which will probably be paid by the end of 2012, each old share will become one McGraw-Hill Financial common share.

McGraw-Hill’s revenue fell 12.1% in 2009, mainly because demand for its credit ratings fell during the credit crisis. Revenue turned around in 2010 and rose to $6.2 billion in 2011.

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Stock market advice: Two new companies continue to expand with new acquisitions

Earnings rose by 19.6% to $884.6 million in 2011. Earnings per share jumped 23.3%, to $2.91, in 2011.

Meanwhile, the two new companies continue to expand their operations. For example, Standard & Poor’s has formed a joint venture with CME Group (Nasdaq symbol CME) and Dow Jones & Co. This new business, called S&P Dow Jones Indices, owns over 830,000 financial market indices, including the S&P 500 and the Dow Jones Industrial Average. McGraw-Hill Financial owns 73.0% of this venture, CME owns 24.4% and Dow Jones owns 2.6%.

In addition, the education business recently paid an undisclosed sum for Key Curriculum, a private firm that makes software for teaching math.

The stock has gained roughly 40% since the company announced the breakup in September 2011.

The two new companies intend to pay a dividend, but have yet to set a rate. Meanwhile, McGraw-Hill will continue to pay quarterly dividends of $0.255 a share until the breakup, for an annualized yield of 1.9%.

In the latest edition of Wall Street Stock Forecaster, we consider the added risk of integrating new acquisitions as McGraw-Hill splits into two separate companies. We also look at whether the share price can keep rising. We conclude with our clear buy-hold-sell advice on the stock.

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When you have received spinoff shares, did you keep them or get rid of them? In either case, were you pleased with your decision? Let us know what you think.