With the rise of low-cost indexing, asset management is all about scale these days. No longer are investors willing to pay hefty fees for poor gains. For those in the asset management business, being big is all that matters. And luckily for our Best Dividend Stocks List pick in the sector, it happens to be one of biggest on the planet.
With trillions in assets under management, our pick is one of the largest asset managers in the world. That scale – even with fees running practically free for some products – allows our pick to pull in billions in revenues. The best part is our pick is one of the largest providers of index funds and ETFs. As one of the go-to names in indexing, our pick has continued to get bigger, while other active-focused managers have realized outflows.
But our pick isn’t just a one-trick indexing pony.
The secret has been our pick’s focus on technology and modeling for its other side of business. Low-cost indexing pulls in customers. But thanks to big spending on technology upgrades, our pick is also seeing higher margins from active management as well. Using quantitative models and risk analysis, our pick’s active mutual funds, ETFs and hedge funds have continued to beat the market. Meanwhile, its high-tech modeling software continues to be coveted by institutional investors including the U.S. government. All of this has helped the firm overcome low fees from its indexing arm.
For investors, this has meant a steady diet of big profit increases, buybacks and dividend increases. And with the firm still executing and a rosy economic outlook on the horizon, the future looks bright for our pick.
To summarize, here are five reasons why you should own this stock:
- One of the largest asset managers on the planet with trillions under its umbrella. Total assets grew by more than 10% in the latest reported quarter!
- Wide range of offerings, including a diverse index ETF line up, as well as active mutual funds.
- Strong dividend growth throughout its history, with management pledging to raise its payout next quarter again.
- Moves into A.I., risk control software and ESG have continued to boost margins and revenues even further.
- Healthy payout ratio of 48% and growing yield of 1.95%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary Dividend.com Rating system. Go Premium to find out the entire list.
