Evercore Partners Inc.

by Zacks Equity Research

December 27, 2012 |

Earnings estimates for Evercore Partners Inc. (EVR - Free Report) have been advancing since this provider of investment banking advisory services reported its second straight quarterly earnings beat in late October. This Zacks #2 Rank (Buy) currently enjoys a decent dividend yield of 3.0%.

With a long-term expected earnings growth rate of 14%, reasonable valuation and a strong dividend yield, Evercore Partners is a promising pick for investors seeking both growth and income.

Third Quarter EPS Moves Higher

On October 25, Evercore Partners reported third-quarter 2012 adjusted earnings per share of 40 cents, topping the Zacks Consensus Estimate of 34 cents by 18%, while it lagged the year-ago earnings of 46 cents by 13%. Better-than-expected results were mainly aided by prudent expense management.

Net revenues dipped 6.3% year over year to $153.0 million. Operating margin stood at 20.0%, in line with the prior year. However, the company's total expenses declined 7.3% to $138.8 million over the same period.

Rising Earnings Estimate Revisions

The Zacks Consensus Estimate for 2012 is up by 3.5% to $1.47 over the past 60 days, as 4 of 6 estimates were revised higher. The Zacks Consensus Estimate for 2013 has advanced 0.5% to $1.92, as 1 out of 6 estimates moved upward over the same time frame.

The Zacks Consensus Estimate for 2012 reflects year-over-year growth of about 25%, while the expected growth rate for 2013 is 30%.

Steady Dividend Payment

Evercore Partners is one of the few investment banks that maintained its dividend payment throughout the financial crisis. Moreover, concurrent with the third-quarter earnings release, the company announced a dividend hike of 10%.

Currently, the company pays a quarterly dividend of 22 cents per share, representing a yield of 3.0%.

Reasonable Valuation

Shares of Evercore Partners currently trade at 20x 12-month forward earnings, in line with the peer group average. Its price to book ratio of 1.8 is at a significant premium to the industry median of 0.8. The company has a trailing 12-month ROE of 10.6%, compared with the peer group average of 2.0%. This implies that the company reinvests its earnings more efficiently than its industry peers.

Chart Shows Strength

Evercore Partners has witnessed strong price momentum since the third quarter earnings release. Moreover, the company has been continuously outperforming its 200-day moving average over the last three months, exhibiting a steady growth trend. The year-to-date return for the stock is approximately 11%.

About Evercore Partners

Headquartered in New York, Evercore Partners provides various investment banking advisory and investment management services. The company was founded in 1996 and conducts business worldwide. The company has a market capital of about $863 million.

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