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AllianceBernstein (AB) Stock in Focus on 7.7% Dividend Yield
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In this current backdrop, when the financial sector is facing turmoil due to the regional banking crisis and expectations of economic slowdown/recession in the near term, investors should watch solid dividend-yielding stocks. Today, we are discussing one such stock – AllianceBernstein Holding L.P. (AB - Free Report) .
This Nashville, TN-based asset manager offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients globally. AB has been increasing its quarterly dividend on a regular basis. Over the past five years, the company increased the dividend 10 times, with an annualized dividend growth rate of 7.2%.
Considering the last day’s closing price of $34.35, AllianceBernstein’s dividend yield currently stands at 7.7%. This is impressive compared with the industry average of 2.53% and attractive for income investors as it represents a steady income stream.
Should you keep an eye on AllianceBernstein stock to earn a high dividend yield? Let’s check out the company fundamentals to understand risk and rewards. This will help us make a proper investment decision.
AllianceBernstein has been witnessing steady growth in net revenues. While the same declined in 2022, it recorded a three-year (2019-2022) CAGR of 5.4%. The increase was primarily driven by solid assets under management (AUM) balance (witnessed a CAGR of 1.2% over the same time frame) and a decent operating backdrop. Revenues are expected to grow 5% and 7% in 2023 and 2024, respectively.
AB is making efforts to diversify revenues. In November 2022, the company and Societe Generale (SCGLY - Free Report) announced the formation of a joint venture (JV) by combining their respective cash equities and equity research businesses.
SCGLY intends for a 51% stake in the JV, with an option to reach 100% ownership after five years. Since AB will own less than 50% of the JV, it anticipates de-consolidating Bernstein Research from its financial statements following the deal's completion (expected before 2023-end). This is likely to have a modest positive impact on the company’s operating margin. But the transaction is not expected to have an impact on AllianceBernstein’s asset management business or Bernstein Private Wealth Management’s business.
The JV will likely provide premier investment insights into the American, European and Asia Pacific equity markets in addition to unparalleled liquidity access and leading global trading technology. Headquartered in London, it would be run as a long-term partnership under the Bernstein name.
Additionally, AllianceBernstein has a solid balance sheet position. As of Mar 31, 2023, the company’s debt was $1.04 billion, while cash and cash equivalents were $886 million. Given the earnings strength and robust liquidity position, the company will be able to meet its debt obligations even if the economic situation worsens.
Despite the near-term headwinds, AB will likely be able to record inflows across its distribution channels. This will keep supporting its financials.
Over the past six months, shares of AllianceBernstein have lost 13% compared with the industry’s fall of 2.5%.
A couple of other finance stocks, like Ares Capital Corporation (ARCC - Free Report) and Invesco Ltd. (IVZ - Free Report) , are worth a look as these have robust dividend yields.
Considering the last day’s closing price, Ares Capital’s dividend yield currently stands at 10%. Over the past six months, the shares of ARCC have lost almost 1%.
Based on the last day’s closing price, Invesco’s dividend yield currently stands at 5%. Over the past six months, the shares of IVZ have lost 17.7%.
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AllianceBernstein (AB) Stock in Focus on 7.7% Dividend Yield
In this current backdrop, when the financial sector is facing turmoil due to the regional banking crisis and expectations of economic slowdown/recession in the near term, investors should watch solid dividend-yielding stocks. Today, we are discussing one such stock – AllianceBernstein Holding L.P. (AB - Free Report) .
This Nashville, TN-based asset manager offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients globally. AB has been increasing its quarterly dividend on a regular basis. Over the past five years, the company increased the dividend 10 times, with an annualized dividend growth rate of 7.2%.
Considering the last day’s closing price of $34.35, AllianceBernstein’s dividend yield currently stands at 7.7%. This is impressive compared with the industry average of 2.53% and attractive for income investors as it represents a steady income stream.
AllianceBernstein Holding L.P. Dividend Yield (TTM)
AllianceBernstein Holding L.P. dividend-yield-ttm | AllianceBernstein Holding L.P. Quote
Should you keep an eye on AllianceBernstein stock to earn a high dividend yield? Let’s check out the company fundamentals to understand risk and rewards. This will help us make a proper investment decision.
AllianceBernstein has been witnessing steady growth in net revenues. While the same declined in 2022, it recorded a three-year (2019-2022) CAGR of 5.4%. The increase was primarily driven by solid assets under management (AUM) balance (witnessed a CAGR of 1.2% over the same time frame) and a decent operating backdrop. Revenues are expected to grow 5% and 7% in 2023 and 2024, respectively.
AB is making efforts to diversify revenues. In November 2022, the company and Societe Generale (SCGLY - Free Report) announced the formation of a joint venture (JV) by combining their respective cash equities and equity research businesses.
SCGLY intends for a 51% stake in the JV, with an option to reach 100% ownership after five years. Since AB will own less than 50% of the JV, it anticipates de-consolidating Bernstein Research from its financial statements following the deal's completion (expected before 2023-end). This is likely to have a modest positive impact on the company’s operating margin. But the transaction is not expected to have an impact on AllianceBernstein’s asset management business or Bernstein Private Wealth Management’s business.
The JV will likely provide premier investment insights into the American, European and Asia Pacific equity markets in addition to unparalleled liquidity access and leading global trading technology. Headquartered in London, it would be run as a long-term partnership under the Bernstein name.
Additionally, AllianceBernstein has a solid balance sheet position. As of Mar 31, 2023, the company’s debt was $1.04 billion, while cash and cash equivalents were $886 million. Given the earnings strength and robust liquidity position, the company will be able to meet its debt obligations even if the economic situation worsens.
Despite the near-term headwinds, AB will likely be able to record inflows across its distribution channels. This will keep supporting its financials.
Over the past six months, shares of AllianceBernstein have lost 13% compared with the industry’s fall of 2.5%.
Image Source: Zacks Investment Research
So, income investors must watch this Zacks Rank #3 (Hold) stock, as this will help generate robust returns over time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Stocks With Solid Dividends
A couple of other finance stocks, like Ares Capital Corporation (ARCC - Free Report) and Invesco Ltd. (IVZ - Free Report) , are worth a look as these have robust dividend yields.
Considering the last day’s closing price, Ares Capital’s dividend yield currently stands at 10%. Over the past six months, the shares of ARCC have lost almost 1%.
Based on the last day’s closing price, Invesco’s dividend yield currently stands at 5%. Over the past six months, the shares of IVZ have lost 17.7%.