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Lazard (LAZ) Reflects Organic Growth: Time to Buy the Stock?
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In the Q1 earnings season, the Finance sector was one of the best performers. Though uncertainty over further interest rate hikes on mixed U.S. economic data and increasing signals of rising political commotion in the White House are perceived, still we can add some of the banking stocks to our basket based on strong fundamentals and solid long-term growth opportunity.
Lazard Ltd. (LAZ - Free Report) is one such stock. While the investment manager’s significant dependence on global markets remains a headwind, its consistent organic growth and cost-management initiatives, along with strong capital deployment activities, are expected to be key drivers for Lazard over the long run.
The company’s robust fundamentals have contributed to 33.9% gain in share price in the last one year as compared with 15.5% growth recorded for the Zacks categorized Investment Management industry.
Moreover, the company’s earnings estimate has been revised around 1% upward for the current year, over the last 30 days. As a result, it carries a Zacks Rank #2 (Buy).
Organic growth remains a key strength at Lazard, as reflected by its revenue growth trend. Though operating revenues descended just 2% year over year in 2016, it witnessed a CAGR of 6.8% over the five-year period (2011–2015), with the increasing trend continuing in first-quarter 2017. Notably, in Sep 2016, Lazard expanded financial advisory in North America, with the acquisition of Canada-based Verus Partners, an independent boutique. In addition, in Oct 2016, the company acquired its remaining 50% stake in MBA Lazard, its financial advisory business in Latin America, to strengthen its operations in Latin America, as well as global markets.
Lazard is diligently working on its cost-containment measures. In 2012, the company announced cost-reduction initiatives for which the full impact of the savings was reflected in 2014. Further, the company’s investment strategies in global, local and emerging markets in both equities and fixed income have boosted its AUM. Though AUM decreased 5% year over year in 2015, it increased 6% in 2016, along with recording a CAGR of 11.8% over the four-year period (2011–2014). The increasing trend continued in first-quarter 2017 and is expected to continue in the upcoming quarters as well, with anticipated improvement in the market.
Lazard has more than doubled its quarterly dividend since the beginning of 2010, returning nearly $4 billion in capital to shareholders. Additionally, the company declared a 20% increase in its special dividend in Feb 2016. Furthermore, in Nov 2016, the board of directors’ approved an additional share repurchase of $236 million, bringing the total amount to $400 million. Recently, the company hiked its quarterly cash dividend by 8% in Apr 2017. We believe that such steps are bound to boost investors’ confidence in the stock.
Cohen & Steers, Inc. (CNS - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped over 9.3% over the past six months. It currently carries a Zacks Rank #2.
Artisan Partners Asset Management Inc. (APAM - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 8.5% over the last three months. It presently holds a Zacks Rank #2.
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Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>
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Lazard (LAZ) Reflects Organic Growth: Time to Buy the Stock?
In the Q1 earnings season, the Finance sector was one of the best performers. Though uncertainty over further interest rate hikes on mixed U.S. economic data and increasing signals of rising political commotion in the White House are perceived, still we can add some of the banking stocks to our basket based on strong fundamentals and solid long-term growth opportunity.
Lazard Ltd. (LAZ - Free Report) is one such stock. While the investment manager’s significant dependence on global markets remains a headwind, its consistent organic growth and cost-management initiatives, along with strong capital deployment activities, are expected to be key drivers for Lazard over the long run.
The company’s robust fundamentals have contributed to 33.9% gain in share price in the last one year as compared with 15.5% growth recorded for the Zacks categorized Investment Management industry.
Moreover, the company’s earnings estimate has been revised around 1% upward for the current year, over the last 30 days. As a result, it carries a Zacks Rank #2 (Buy).
Organic growth remains a key strength at Lazard, as reflected by its revenue growth trend. Though operating revenues descended just 2% year over year in 2016, it witnessed a CAGR of 6.8% over the five-year period (2011–2015), with the increasing trend continuing in first-quarter 2017. Notably, in Sep 2016, Lazard expanded financial advisory in North America, with the acquisition of Canada-based Verus Partners, an independent boutique. In addition, in Oct 2016, the company acquired its remaining 50% stake in MBA Lazard, its financial advisory business in Latin America, to strengthen its operations in Latin America, as well as global markets.
Lazard is diligently working on its cost-containment measures. In 2012, the company announced cost-reduction initiatives for which the full impact of the savings was reflected in 2014. Further, the company’s investment strategies in global, local and emerging markets in both equities and fixed income have boosted its AUM. Though AUM decreased 5% year over year in 2015, it increased 6% in 2016, along with recording a CAGR of 11.8% over the four-year period (2011–2014). The increasing trend continued in first-quarter 2017 and is expected to continue in the upcoming quarters as well, with anticipated improvement in the market.
Lazard has more than doubled its quarterly dividend since the beginning of 2010, returning nearly $4 billion in capital to shareholders. Additionally, the company declared a 20% increase in its special dividend in Feb 2016. Furthermore, in Nov 2016, the board of directors’ approved an additional share repurchase of $236 million, bringing the total amount to $400 million. Recently, the company hiked its quarterly cash dividend by 8% in Apr 2017. We believe that such steps are bound to boost investors’ confidence in the stock.
Stocks That Warrant a Look
Franklin Resources, Inc. (BEN - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 3.7%. It also carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cohen & Steers, Inc. (CNS - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped over 9.3% over the past six months. It currently carries a Zacks Rank #2.
Artisan Partners Asset Management Inc. (APAM - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 8.5% over the last three months. It presently holds a Zacks Rank #2.
3 Top Picks to Ride the Hottest Tech Trend
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>