It seems to be a wise idea to add Virtus Investment Partners, Inc. VRTS stock to your portfolio now, given the strong fundamentals and promising prospects. Further, the company’s solid assets under management (AUM) balance will likely keep boosting revenue growth.
The stock has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for 2019 and 2020 moved 5.4% and 9% north, respectively.
Further, this Zacks Rank #1 (Strong Buy) stock has surged 46.5% so far this year, outperforming the industry’s rise of 8.3%.
5 Factors That Make Virtus Investment an Attractive Pick
Revenue growth: Organic growth remains a key strength for Virtus Investment. The top line witnessed a five-year CAGR of 5.2% (2014-2018). This was backed by solid AUM balance. Also, its projected sales growth rate of 2.9% for 2019 and 0.7% for 2020 indicate continuation of the momentum.
Earnings strength: Over the past three to five years, earnings of Virtus Investment witnessed 10.8% growth. This uptrend is anticipated to continue as the company’s earnings are projected to be up 17.2% and 4.9% in 2019 and 2020, respectively.
Also, Virtus Investment has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 8.5%.
Further, the company’s projected earnings growth rate for the next five years is 3.9%, promising rewards for shareholders.
Impressive capital deployment: Virtus Investment is actively involved in capital-deployment activities. In August, the company hiked its quarterly dividend by 22% to 67 cents per share. This marks the second consecutive hike, since initiating dividend payouts in May 2014. The company increased its dividend by 22% last year as well.
Moreover, Virtus Investment’s share repurchases authorization is in place. As of Sep 30, 2019, the company had 338,183 shares left for buyback.
Backed by a strong liquidity position, no debt and consistently improving earnings, the company’s capital-deployment actions look sustainable.
Strong leverage: Virtus Investment’s debt/equity ratio is nil against the industry’s average debt/equity ratio of 0.25. This reflects that the company will be financially stable, even during adverse economic situations.
Superior Return on Equity (ROE): Virtus Investment’s ROE of 21.89% compares favorably with the industry average of 12.28%.This highlights the company’s commendable position over its peers in using shareholders’ funds.
Other Key Picks
OFS Credit Company, Inc. OCCI has witnessed 4.3% upward earnings estimate revisions for 2019, in the past 60 days. Moreover, this Zacks #1 Ranked stock has rallied 9.6%, year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cohen & Steers Inc’s CNS ongoing-year earnings estimate moved 3.7% north in 60 days’ time. Additionally, the stock has surged 92.7%, so far this year. It sports a Zacks Rank #1.
Eaton Vance Corporation EV current-year earnings estimate has remained unchanged in the past 60 days. Further, the company’s shares have gained 36% in the year-to-date period. At present, it carries a Zacks Rank of 2 (Buy).
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Cohen & Steers Inc (CNS) : Free Stock Analysis Report
Eaton Vance Corporation (EV) : Free Stock Analysis Report
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OFS Credit Company, Inc. (OCCI) : Free Stock Analysis Report
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