After posting impressive first-quarter 2019 results, BlackRock, Inc. BLK seems to be a good investment option right now. The company’s initiatives to restructure the actively managed equity business, and expand globally via acquisitions to further boost top line and assets under management (AUM) remain impressive.
Moreover, it has been witnessing upward earnings estimate revisions of late, reflecting that analysts are optimistic regarding its earnings growth potential. The Zacks Consensus Estimate for current-year earnings has been revised 3.9% upward over the past 30 days. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Shares of the company have gained 13% in the past six months, outperforming 8.3% rally of the industry it belongs to.
BlackRock has a number of other aspects that make it an attractive investment option right now.
Earnings per Share (EPS) Growth: In the last three to five years, the company witnessed EPS growth of 8.2%, higher than the industry’s growth of 3%. Moreover, BlackRock’s earnings are projected to grow 2.8% and 8.9% in 2019 and 2020, respectively.
Further, the company’s long-term (three to five years) expected EPS growth rate of 10% promises reward for shareholders.
Revenue Strength: Driven by a solid global presence that allows broad diversification and organic growth, BlackRock’s revenues (on a GAAP basis) witnessed a five-year (2014-2018) CAGR of 6.4%. This uptrend is likely to continue in the near term as indicated by its projected sales growth rates of 1.3% for 2019 and 8.9% for 2020.
Impressive Capital Deployment Activities: Driven by capital strength, BlackRock’s capital-deployment activities remain impressive. In January 2019, the company announced a 5% dividend hike. It authorized additional 7 million of share repurchases under the existing share buyback plan. With a solid liquidity position, the company will likely continue rewarding shareholders through strategic capital deployment.
Strategic Acquisitions: Given a solid balance sheet position, BlackRock has expanded primarily via acquisitions. In March 2019, the company announced a deal to buy eFront. In 2018, it acquired Citibanamex’s Asset Management business in Mexico and Tennenbaum Capital. Apart from these, over the years, the company acquired several firms across the globe, thus expanding its footprint. All these are anticipated to support its top-line growth.
Other Stocks to Consider
A few other top-ranked stocks from the same space are Artisan Partners Asset Management Inc. APAM, Franklin Resources, Inc. BEN and Cohen & Steers, Inc. CNS. All these stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Artisan Partners’ earnings estimates for 2019 have been revised 8.4% upward over the past 30 days. Also, its share price has increased 2.5% over the past six months.
The Zacks Consensus Estimate for earnings of Franklin Resources has increased 6.7% for the current fiscal year over the past 30 days. The company’s shares have gained 8.9% over the past six months.
Cohen & Steers’ earnings estimates have been revised 6.9% upward for 2019, over the past 30 days. Also, its share price has increased 28.2% over the past six months.
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