BlackRock Offers Capital Gains, Dividend Growth
BlackRock ( BLK ), the world's biggest money manager, is offering investors the best of both worlds -- dividend growth and capital gains.
The stock is barely within buy range from a bounce off its 10-week moving average last month. It was the first test of support there since it cleared a 192.09 buy point in a saucer-with-handle base last November. It's 34% past the entry.
Meanwhile, BlackRock's dividend has more than doubled since 2008. Earlier this year, the firm increased its quarterly dividend by 12% to $1.68 a share. On an annual basis, that's $6.72 a share, good for a yield of 2.6% -- above the S&P 500's 2.1% yield.
BlackRock has a best-possible 99 Composite Rating, highest in the 95-member Finance-Investment Management industry group, which was ranked 20th out of the 197 industries IBD tracks as of Thursday. The finance sector is also highly ranked.
BlackRock said earlier this month that it would cut 3% of its staff while expanding its partnership with Fidelity Investments. Fidelity customers will be allowed to trade 65 BlackRock iShares ETFs commission-free, up from 30 funds.
"We believe that BlackRock's announcement of job cuts and its decision to mainly focus on organic growth would enable the company to improve its market share," Zacks Equity Research said March 19.
"Additional emphasis on the growing ETF market will augur well for BlackRock's growth story," it added.
BlackRock, which manages about $3.8 trillion in assets, has posted two straight quarters of accelerating earnings growth, culminating in a 29% gain in Q4. Revenue growth has also picked up.
Profit for this year is seen rising 14% to $15.60 a share, the fifth straight annual increase.