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5 Reasons Why You Should Buy Blackstone (BX) Stock Right Now

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BlackstoneBX is a profitable investment option driven by steady earnings growth and strong liquidity position. Further, the company will continue benefiting from diversified products, revenue mix and rise in assets under management (AUM). Also, its robust fund-raising ability will support profitability.

Analysts also seem to be optimistic about its growth prospects as evident from the upward estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for the current year has been revised 4.1% upward.

Further, this Zacks Rank #2 (Buy) stock has rallied 15.9% so far this year against the industry 's decline of 9.8%.

Why Blackstone Is an Attractive Investment Option

Earnings Growth: In the last three to five years, Blackstone reported 6.4% decline in earnings, mainly due to a tough operating environment. However, the company's earnings are projected to grow 9.6% and 2% in 2018 and 2019, respectively.

Further, its long-term (three to five years) expected EPS growth of 10.6% promises rewards for shareholders.

Also, the company has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average beat of 22.9%.

Revenue Strength: Blackstone's revenues witnessed a three-year CAGR of 23.8% (2015-2017). Growth is anticipated to continue on the back of better performance of its funds. Top line is expected to grow nearly 3% in 2018 and 9.4% in 2019, indicating continued rise.

Steady AUM Growth: Blackstone's fee-earning AUM and total AUM have consistently demonstrated strong growth, aided by increasing net inflows. Over the last four years (2014-2017), fee-earning AUM has seen a CAGR of 15.7% and total AUM has recorded a CAGR of 14.3%. The growth trajectory will likely continue, driven by the company's diversified products, revenue mix and superior position in the alternative investments space.

Stock Seems Undervalued: With respect to price-to-cash flow (P/CF) and PEG ratios, Blackstone looks relatively undervalued. The company's P/CF ratio of 6.78 is below the industry average of 9.46. Also, the PEG ratio for the company is 1.13 compared with industry average of 1.38.

Superior Return on Equity (ROE): Blackstone has an ROE of 22.64%, significantly higher than the industry average of 12.95%. This shows that the company reinvests its cash more efficiently.

Other Stocks to Consider

Other stocks in the same space worth a look are Lazard Ltd. LAZ , Cohen & Steers Inc. CNS and Waddell & Reed Financial, Inc. WDR . All these stocks carry Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Lazard has witnessed an upward earnings estimate revision of 2.9% for the current year, over the past 60 days. Its share price has increased 10.1% in the past year.

Cohen & Steers' Zacks Consensus Estimate for the current year has moved nearly 1% upward over the past 60 days. Its shares have gained 7.6% in the past 12 months.

Waddell & Reed has witnessed an upward earnings estimate revision of 2.3% for the current year over the past 60 days. Its shares price has increased 12.3% in a year's time.

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Waddell & Reed Financial, Inc. (WDR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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