Asset management is a game of size. The bigger you are, the more you can recoup in fee revenue. Size and scope have only become more important during this era of low-cost passive/index funds. It takes a lot of assets to pull billions of revenues when you’re only charging 0.05% or so in fees. For those firms that have the necessary scale, the business model is as profitable as ever.
Luckily, for our Best Dividend Stocks List pick in the sector, it just happens to be one of the biggest around. Thanks to its first-mover status in the world of ETFs and other passive investment vehicles, our pick has become an absolute monster in the world of investment management. This placement has made our pick a cash flow, profit and dividend king over the last decade. Earnings were up by nearly 14% during its latest report quarter.
But our firm continues to find ways to grow and move clients into higher-cost products.
Environmental, social, and governance (ESG), risk management and artificial intelligence are now big initiatives for our pick. And customers seem to be flocking to them. Revenues in these areas continue to grow rapidly as they work in concert with our pick’s many passive products. The combination continues to provide plenty of additional boost to our pick’s and its investors’ bottom lines.
Over the long haul, the size and scope of our asset manager pick will continue to suit it well into the future.
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, with total assets growing by nearly 30% year-over-year!
- Wide range of offerings, including a diverse index ETF line up, as well as active mutual funds.
- Strong dividend growth throughout its history, with a nearly 15% increase at the start of 2021.
- Moves into AI, risk-control software and ESG have continued to boost margins and revenues even further.
- Healthy payout ratio of 43% and growing yield of 1.73%.
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