Over the years, investment management company BlackRock Inc (NYSE: BLK) has thrived on its diversified business model and continued focus on investing for the long term. It is widely expected that financial markets would rebound sharply from the current slump as the economy shifts to recovery mode, and BlackRock looks well-positioned to benefit from the rally in financial markets.
BLK is one of the most expensive Wall Street stocks and is trading slightly below its 52-week average after the recent decline. A key factor that makes the stock an attractive investment is the dividend hikes – after the latest increase, it stands at $5.0 offering an above-average yield of 2.9%. That, combined with the recent dip in price, offers a rare buying opportunity.
Buy BLK?
Given the long-term focused business strategy and analysts’ bullish outlook, the stock is unlikely to disappoint investors. The valuation is cheap for the company that is the world’s largest asset manager. It is s good buy-and-hold stock for income investors.
Interestingly, the management believes that the current market environment – marked by geopolitical issues, high inflation, lingering pandemic headwinds, and fears of an impending global recession — can offer good opportunities for long-term investors, which would enable the company to achieve high growth this year. The fact that bear markets do not last forever, and would essentially be followed by a bull market, bodes well for BlackRock.
Financials
In 2022, the New York-headquartered financial technology firm delivered positive organic base fee growth and posted more than $300 billion of net inflows, with each of the three regions performing well. Meanwhile, quarterly earnings declined year-over-year for the third time in a row, and the company ended the year on a mixed note.
“Throughout BlackRock’s history, we have consistently invested in our business with a long-term focus and commitment to serving clients across market environments. We have established leadership positions in high-growth areas such as ETFs, private markets, outsourced solutions, and technology. And we have integrated these industry-leading capabilities into our one BlackRock business model and culture to create a distinct and differentiated value proposition for clients,” said BlackRock’s chief financial officer Gary Shedlin in a recent statement.
Q4 Performance
In the fourth quarter of 2022, total assets under management declined 14% annually to $8.59 trillion. There was a 15% fall in revenues to $4.34 billion. As a result, adjusted profit dropped to $8.93 per share from $10.68 per share in the prior-year period. The results, meanwhile, topped expectations. The company is scheduled to publish first-quarter results on April 14, before the opening bell.
Blackrock’s stock has lost about 8% since the beginning of 2023. On Monday, it traded almost flat after opening the session lower.
