BlackRock Lifts Dividend As Profit Gains Heat Up
BlackRock ( BLK ) is raising its dividend and showing acceleration in its quarterly results, so it's worth a look if you're seeking income and growth potential.
The asset manager said Jan. 17 that it's hiking its quarterly payout by 12% to $1.68 a share. It also reported fourth-quarter earnings on that day, achieving a 29% gain. That improved on Q3's 23% increase.
Q4 revenue increased 14% to $2.54 billion, heating up from Q3's 4% rise.
IBD's CAN SLIM investing strategy calls for focusing on companies displaying strong gains in their quarterly results, and BlackRock is showing exactly that. However, EPS growth could slow in the current quarter, with Wall Street expecting just a 10% increase.
The New York City-based company's solid recent performance has helped it earn spots lately in some key IBD screens, including the Big Cap 20 and the IBD 50.
BlackRock's 92-member industry group is also showing strength. Finance-Investment Management ranked No. 39 out of IBD's 197 groups as of Monday's edition, up moderately from its ranking in prior weeks.
It can be a good approach to stick to the top 20 to 40 industry groups, and investment managers have just barely moved into that realm.
With its latest increase, BlackRock now provides an annual yield of about 2.8%. The company has hiked its payout for four years in a row.
Another of BlackRock's strengths is increasing institutional ownership. The number of U.S. mutual and hedge funds with a stake has increased for eight quarters in a row, according to IBD data. That helps explain the stock's stellar up-down volume ratio of 2.3 and its IBD Accumulation-Distribution Rating of A+.
In terms of chart action, BlackRock has traded in a narrow range for a few weeks, creating a three-weeks-tight pattern with a possible buy point at 238.72. Watch to see if the stock can break through that level in heavy turnover.
A three-weeks-tight structure generally serves as a way to add to an existing position, but aggressive investors can use it as an opportunity to buy an initial batch of shares.