Waddell & Reed Financial, Inc.
) soared to a new 52-week high of $66.24 at the end of the
trading session on Jan 3. However, the stock closed the session
at $66.05, which reflects a solid return of 88.8% over the last
one year. The trading volume for the session was 697,749 shares.
AFFIL MANAGERS (AMG): Free Stock Analysis
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WADDELL&REED -A (WDR): Free Stock Analysis
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Despite the strong price appreciation, this Zacks Rank #1 (Strong
Buy) investment manager has plenty of upside left, given its
positive estimate revision over the last 60 days and the expected
long-term earnings growth of 18.1%.
Waddell & Reed's impressive performance was driven by its
efficient capital deployment activities and strong third-quarter
2013 results comprising a positive earnings surprise of 11.1%.
In Dec 2013, Waddell & Reed hiked the quarterly cash dividend
on its Class A common stock by 21% from the prior payout to 34
cents. The dividend will be paid on Feb 3 to shareholders of
record as of Jan 13.
Waddell & Reed's impressive dividend payouts and share
buybacks make it an attractive pick for yield-seeking investors.
Even during the financial crisis, when many banks and investment
managers slashed or discontinued dividend payments, Waddell &
Reed not only continued with its disbursement but managed to
increase it as well.
On Oct 29, Waddell & Reed declared third-quarter earnings of
80 cents per share, which beat the Zacks Consensus Estimate of 72
cents. Robust results were driven by top-line growth, partially
offset by higher operating expenses.
Moreover, Waddell & Reed delivered positive earnings
surprises in the last 4 quarters with an average beat of 5.6%.
Estimate Revisions Show Potency
In the last 60 days, the Zacks Consensus Estimate for 2013
increased nearly 1.8% to $2.82 per share. For 2014, the Zacks
Consensus Estimate advanced roughly 2.9% to $3.51 per share over
the same time frame.
Other investment managers worth considering include
Affiliated Managers Group Inc.
Ameriprise Financial, Inc.
Artisan Partners Asset Management Inc.
). All these stocks have a Zacks Rank #2 (Buy).