Dividend.com has added an asset manager to the Best Dividend Stocks List and removed a leading agricultural firm.
Thanks to the pressures of low-cost indexing and the birth of exchange-traded funds (ETFs), many legacy asset managers have had time to adjust to the new environment. As the focus has been on costs, we’ve now seen waves of mergers, fund closures and margin erosions for many former top firms. However, when surveying the asset manager landscape, one factor stands out: Those financial firms operating in specialized niches have continued to thrive and soak up investors’ dollars and fee revenues. A prime example of this is our newest Best Dividend Stocks List pick in the financial sector.
Our pick has continued to focus on a very specific client – high-net-worth families and individuals. These clients require a different touch than someone simply saving for retirement. And in that, our pick has continued to prosper. Offering not only standard investment management but trust services, tax administration, credit/ liquidity management and even banking services, our pick has continued to see rising margins and assets grow over the last few years.
The best part is our pick isn’t just some old fossil in the industry, it continues to adapt to changing client tastes, even among the mass affluent.
For starters, our pick has embraced fintech in a big way. Thanks to new technological integration, our pick has further improved its margins. Secondly, our pick continues to win on the index investing front. As one of the original firms to embrace indexing decades ago, our new pick has added a successful list of ETFs and index mutual funds to its line up.
With our pick now firing on all cylinders – on both asset growth and improving margins – it’s quickly become a dividend stalwart, raising its payout over the last seven years straight.
To summarize, here are five reasons why you should own this stock:
1. Global asset manager with nearly $1.2 trillion in assets under custody or administration.
2. Has embraced two of the biggest trends in asset management space – technology and indexing – to further grow.
3. Pre-tax margins are nearly double of its six largest competitors in the wealth management space.
4. Thanks to hefty margins and cash flows, our pick has raised its annual payout seven times in a row!
5. Healthy payout ratio of 41% and strong yield of 2.62%.
