Earnings momentum for
Och-Ziff Capital Management Group LLC
) have been on the rise since this investment manager posted
impressive second quarter results in early August. Now this Zacks
#2 Rank (Buy) is preparing to report third quarter results later
this month. The company has surpassed quarterly earnings estimates
in 2 of the past 3 quarters, and pays a regular quarterly dividend
that yields a solid 5.5%.
Q3 Release Coming Up
Och-Ziff Capital is expected to release its third quarter earnings
on October 29. The Zacks Consensus Estimate is at 13 cents per
share on expected revenue of $128.0 million.
On August 2, Och-Ziff Capital reported second quarter 2012 earnings
per share of 36 cents, topping the Zacks Consensus Estimate by 177%
and last year's earnings by 176.9%. The upsurge was mainly
attributed to growth in total revenues and lower expenses.
Economic income revenues for the company climbed 7.0%
year-over-year to $141.9 million. Total revenues stood at $178.4
million, up 21.1% year over year. Moreover, total expenses
decreased to $476.1 million from $492.2 million in the year-ago
period, primarily aided by lower compensation and benefits
Upward Earnings Estimate Revisions
The Zacks Consensus Estimate for 2012 is up 3.6% in the past 2
months to $1.15 per share. The Zacks Consensus Estimate for 2013 is
at $1.27 per share, suggesting a year-over-year improvement of more
Och-Ziff Capital is one of the few banks that maintained its
dividend payment throughout the financial crisis. The company has
announced dividend hikes twice this year, with the latest boost in
August 2012 of 40%.
Currently, the company pays a quarterly dividend of 14 cents per
Class A share, affirming a yield of 5.5%.
Valuation Looks Reasonable
Shares of Och-Ziff Capital currently trade at 9.0x 12-month forward
earnings, a 24% discount to the peer group average of 11.8x. Its
price to book ratio of 1.6 is at a 14% premium to the industry
median of 1.4. The company has a trailing 12-month ROE of 20.0%,
compared with the peer group average of 13.8%.
Chart Shows Strength
Och-Ziff Capital has witnessed strong price momentum since the
second quarter earnings release. Moreover, the company has been
continuously outperforming its 50-day moving averages and the
S&P 500 since the beginning of August 2012. The year-to-date
return for the stock is 25.8%, compared with the S&P 500's
return of 16.2%.
Och-Ziff Capital is a New York-based investment management company
that invests in equity markets worldwide. The company was founded
in 1994 and conducts business in New York with additional offices
in London, Hong Kong, Tokyo, Bangalore and Beijing. It has a market
cap of about $1.4 billion and assets under management of about
$31.0 billion as of October 1, 2012. Och-Ziff Capital competes with
Virtus Investment Partners, Inc. (
), among others.
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades are
about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called
OCH-ZIFF CAPTL (OZM): Free Stock Analysis
To read this article on Zacks.com click here.