Low-cost indexing has changed the game for many firms in the asset manager sector. As investors look toward fees, sales-loads and general underperformance of bloated active mutual funds, many firms that manage money have been suffering. Asset management has quickly become a game of scale. Luckily for our new Best Dividend Stocks List pick in the sector, it happens to be one of the biggest on the planet.
With multi-trillion dollars in assets under management, our new pick is one of the largest managers of money on the planet. With expertise covering index ETFs, active mutual funds and other products, our pick has been able to use its size and scope to still produce hefty revenues from a new cost-focused environment. Those revenues have translated into strong dividend growth over the last decade.
But our pick isn’t just clipping fee revenue from its managed funds; there are plenty of growth opportunities as well.
This all comes from a hefty dose of technology spending. Our pick has developed some of the most sophisticated models and software designed to analyze risk and build portfolios. This proprietary software is not only used by its managers to deliver better outcomes but has also been tapped by various hedge funds, institutional investors and even the government/Federal Reserve. These risk control products come with very fat margins and allow our pick to keep revenue growth going in the face of dropping asset management fees.
Add in its continued moves into retirement products/plans, as well as additional innovation, and you have a recipe for long-term success.
To summarize, here are five reasons why you should own this stock:
1. One of the largest asset managers on the planet.
2. Wide range of offerings, including a diverse index ETF lineup, as well as active mutual funds.
3. Increased its dividend for 10 years straight, with its latest jump being over 10%.
4. Moves into big data, A.I. and risk control software have continued to boost margins/revenues even further.
5. Healthy payout ratio of 55% and growing yield of 3%.
Removal of an Industrial Name
Despite recent gains in the online shopping front, dwindling global trade has started to hurt the need for warehouses and shipping products. This is a huge blow to our pick in the sector. As one of the largest makers of warehousing supplies and inventory management products, earnings have flatlined. Moreover, the stock has lost momentum as it is currently trading at more than 25% below its 52-week high. As a result, its DARS score has suffered. With its score now too low, we’ve been forced to remove it from our list.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.
