Here's Why You Should Hold On to Cohen & Steers Stock Now
Cohen & Steers, Inc. CNS is well poised for growth, driven by steady revenue growth and a strong balance sheet. However, mounting expenses and increased dependence on investment advisory revenues are concerns.
Cohen & Steers’ organic growth looks impressive. The company’s total revenues (GAAP basis) witnessed a five-year (2015-2019) CAGR of 5.7%. This upswing was mainly driven by solid AUM balance, which has witnessed a CAGR of 8.2% during the same time frame. The company’s wide range of products and sound investment strategies are likely to attract investors and further support revenue growth in the following quarters. Also, the AUM balance is expected to improve in the following quarters as the economy stabilizes.
Moreover, Cohen & Steers’ capital-deployment activities make it an attractive choice for investors. Since 2011, it has been increasing its dividend annually, with the latest one announced this February. Strong liquidity position and no debt keep the company’s capital deployments sustainable. Hence, it is expected to continue enhancing shareholder value.
Also, shares of this Zacks Rank #3 (Hold) company have gained 6.7% over the past year, as against the marginal decline recorded by the industry.
However, Cohen & Steers’ escalating expenses is a concern. Expenses witnessed a CAGR of 5.7% over the last five years (ended 2019), due to a rise in employee compensation and benefits expenses, and general and administrative costs. Further, incremental investments in technology are expected to keep operating expenses elevated.
Additionally, the company’s high dependence on investment advisory revenues is another concern. Investment advisory revenues constituted more than 90% of total revenues at the end of the first six months of 2020. As Cohen & Steers will likely continue relying on this, a decline in advisory engagements or the market for advisory services might affect its financial performance.
Further, the Zacks Consensus Estimate for earnings has been revised 2.5% and 2.4% downward for 2020 and 2021, respectively, over the past two months.
Stocks to Consider
Credit Acceptance Corporation’s CACC Zacks Consensus Estimate for 2020 earnings moved 23.2% upward to $10.48 in the past 60 days. The stock currently holds a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BrightSphere Investment Group Inc.’s BSIG Zacks Consensus Estimate for the current-year earnings moved 4.5% north to $1.62 per share in the past two months. The stock currently carries a Zacks Rank of 2.
Eaton Vance Corp.’s EV Zacks Consensus Estimate for earnings moved up 6.4% to $3.33 in 60 days for 2020. The stock currently carries a Zacks Rank of 2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
Click to get this free report
Cohen Steers Inc (CNS): Free Stock Analysis Report
Eaton Vance Corporation (EV): Free Stock Analysis Report
Credit Acceptance Corporation (CACC): Free Stock Analysis Report
BrightSphere Investment Group Inc. (BSIG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.