The global asset management market is estimated to have grown in double digits and reached above $100 trillion in 2020, emerging stronger from the coronavirus crisis. North America accounted for nearly half of it. BlackRock, Inc. (NYSE: BLK), which is considered the largest asset manager, has consistently stayed on the growth path riding the strength of its ETF portfolio and shift to sustainable investments.
A Dividend King
The New York-based company has long been an investors’ favorite, especially income investors looking for stable cash flows. Currently, it pays a dividend of $4.13 per share that represents a 1.8% yield, after hiking the payout at regular intervals. The annualized dividend represents a 13.8% increase. The uptrend is expected to continue in the foreseeable future, if the bullish earnings outlook is any indication.
Read management/analysts’ comments on BlackRock’s Q2 2021 earnings
Experts predict that BlackRock’s stock would make strong gains and cross the $1,000-mark in the next twelve months. That, combined with the impressive dividend yield, makes BLK a compelling investment, though some prospective buyers would find it unaffordable. Analysts overwhelmingly recommend buying the stock, which reached an all-time high in mid-August after staying on an upward trajectory for over a year. But, it pulled back since then and has settled at the pre-peak levels, offering a fresh buying opportunity.
Aladdin Power
Of late, the company’s rapidly growing technology platform has been contributing handsomely to its top-line, thanks to Aladdin, the portfolio management software that links investors to the markets. Aladdin has been instrumental in equipping BlackRock to meet the changing customer needs, supported by the superior portfolio construction capabilities.
The iShares ETF franchise that caters to both institutional and retail investors — covering a broad range of asset classes including fixed income and sustainable funds — is expected to remain a key growth driver and strengthen the company’s dominance in the ETF space. The stable client demand for ETFs is evident from the impressive second-quarter results.
Revenues increased consistently over the past few years, despite market conditions turning unfavorable lately, and reached a record high in the most recent quarter. The key financial numbers also topped expectations during that period.
“We have invested and evolved over time to create a globally integrated investment and technology platform that enables clients to construct resilient whole portfolios that meet their objectives regardless of market environment or risk appetite. And we continue to invest in our industry-leading high-growth franchises, such as ETFs, private markets, and technology, and are accelerating investments to drive growth in our ESG, traditional active, and solutions capabilities.“
Gary Shedlin, chief financial officer of BlackRock
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Strong Results
In the June quarter, adjusted earnings and revenues grew in double digits to $10.03 per share and $4.82 billion respectively. At the end of the quarter, total assets under management stood at $9.45 trillion, with the retail segment contributing more than half of it. Meanwhile, net inflows remained broadly unchanged year-over-year at $60 billion, but more than halved sequentially
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BlackRock’s stock opened Thursday’s session higher and gathered more steam in the early hours. In the past twelve months, it moved up around 40% and stayed above the 52-week average. BKL outperformed the S&P 500 index quite often in recent years.