5 Reasons to Add Lazard (LAZ) Stock to Your Basket Right Now
With the Q1 earnings season almost at its end, the Finance sector seems to be one of the best performers. So, we thought of bringing up a stock from the sector that displays strong fundamentals and solid long-term growth opportunities.
Lazard Ltd LAZ is one such stock that not only beat estimates this time, but also has been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 30 days, the Zacks Consensus Estimate for 2017 and 2018 increased 2.4% and 1.9%, respectively.
Further, shares of this Zacks Rank #2 (Buy) stock have gained 13.6% in the last six months, outperforming 8.0% growth recorded by the Zacks categorized Investment Management industry.
Notably, Lazard has a number of other aspects that make it an attractive investment option.
5 Reasons Why Lazard is an Attractive Pick
Revenue Growth: Organic growth remains a key strength at Lazard, as displayed by its revenue growth trend. Though operating revenues descended just 2% year over year in 2016, the figure rose at a CAGR of 6.8% over the five-year period (2011-2015), with the increasing trend continuing in first-quarter 2017. Based on the strong team of indigenous professionals in the Financial Advisory segment and diversified assets under management (AUM) mix in the Asset Management segment, these segments are poised to drive the company’s overall revenue growth.
The company’s projected sales growth (F1/F0) of 8.9% (as against the industry average of about 2.2%) indicates consistent upward momentum in revenues.
Earnings Per Share Strength: Lazard witnessed earnings growth of 15.3% in the last three–five years. In addition, the company’s long-term (three–five years) estimated EPS growth rate of 8.3% promises rewards for investors over the long run. Also, it recorded an average positive earnings surprise of 7.9% over the trailing four quarters.
Steady Capital Deployment: The company has more than doubled its quarterly dividend since the beginning of 2010, returning nearly $4 billion in capital to shareholders. Additionally, Lazard declared a 20% increase in its special dividend in Feb 2016. Further, in Nov 2016, the board of directors approved an additional share repurchase of $236 million, bringing the total amount to $400 million. The company hiked its quarterly cash dividend by 8% in Apr 2017.
Superior Return on Equity (ROE): Lazard’s ROE of 33.1%, as compared with the industry average of 11.1%, reflects the company’s commendable position over its peers.
Stock is Undervalued: Lazard has a P/E ratio of 13.51x compared to the S&P 500 average of 18.67x. Based on this ratio, the stock seems undervalued.
Stocks to Consider
Franklin Resources, Inc. BEN has been witnessing upward estimate revisions for the last 30 days. Over the last six months, the company’s share price has been up more than 11.8%. It also sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cohen & Steers, Inc. CNS has been witnessing upward estimate revisions for the last 30 days. Additionally, the stock jumped over 10% over the past six months. It currently carries a Zacks Rank #2.
OM Asset Management PLC OMAM has been witnessing upward estimate revisions for the last 30 days. Also, the company’s shares have risen nearly 5% over the last one year. It presently holds a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Franklin Resources, Inc. (BEN): Free Stock Analysis Report
Lazard Ltd. (LAZ): Free Stock Analysis Report
Cohen & Steers Inc (CNS): Free Stock Analysis Report
OM Asset Management PLC (OMAM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
