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Here's What Makes Invesco (IVZ) a Promising Investment Bet
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Despite challenges stemming from coronavirus-induced crisis, it seems to be a wise idea to add Invesco Ltd. (IVZ - Free Report) stock to your portfolio. The company benefits from organic growth and global diversification efforts. Further, the company's solid balance sheet gives it a strong footing.
Moreover, the company is witnessing upward earnings estimate revisions lately, reflecting analysts’ optimism regarding its earnings growth potential. In the past 60 days, the Zacks Consensus Estimate for earnings moved 1.8% and 1% upward for 2020 and 2021, respectively. The stock currently sports a Zacks Rank #1 (Strong Buy).
Shares of Invesco have jumped 54.1% in the past three months, outperforming the industry's 23.5% rally.
Mentioned below are some key factors that make Invesco stock an attractive investment option now.
Earnings: Over the past three to five years, Invesco’s earnings have witnessed a decline of 1.6%. Though the same trend is likely to persist this year (the company’s earnings are projected to decline 32.6it is expected to get reversed in 2021. The company is projected to witness earnings growth of 19.7% for 2021.
The company’s earnings for the long term are expected to grow at the rate of 6%.
Revenue: Invesco’s total net revenues have witnessed a compound annual growth rate (CAGR) of 4.1% over the last six years (2014-2019). The increase was mainly driven by solid assets under management (AUM) balance and OppenheimerFunds buyout. AUM witnessed a CAGR of 9.1% over the last six years (2014-2019). Moreover, given a robust institutional pipeline, solid retail channel, and synergies from opportunistic acquisitions, revenues are expected to continue to improve in the quarters ahead.
Although sales are expected to fall 1.4% in 2020, the same is projected to grow 3.6% in 2021.
Balance Sheet Position: Invesco's robust balance sheet gives it strength. Although as of Sep 30, 2020, the company's total debt of $8.7 billion was higher than the cash and cash equivalents balance of $1.3 billion, its total debt to total capital of 37.7% at the end of the third quarter of 2020 improved sequentially. Moreover, its times interest earned of 8.1X improved sequentially and was above the industry average of 5.7X. These, along with the company’s earnings strength, imply that it will be able to meet interest and/or debt obligations if the economic situation worsens.
Global Diversification: Invesco's global footprint bodes well for the future. It maintains a solid foothold in Europe, Canada and the Asia-Pacific. As of Sep 30, 2020, the company’s client AUM outside the United States constituted 28.5% of total AUM. Further, the company's acquisitions of the leading U.K.-based advisor-focused digital solutions firm, Intelliflo, and Europe-based Source, a leading, independent specialist provider of ETFs, will boost its market share globally. This, along with its broad diversification will likely help the company generate further momentum from business in these regions.
Reasonable Valuation: Invesco looks undervalued right now compared with its broader industry. It currently has a price-to-earnings ratio of 10.03, lower than the industry average of 14.57. Also, its price-to-book ratio of 0.76 is below the industry’s 2.12.
Other Stocks to Consider
Federated Hermes, Inc. (FHI - Free Report) has witnessed an upward earnings estimate revision of 2.8% for 2021 over the past 30 days. Its shares have lost 13% so far this year. At present, it carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Farmers National Banc Corp. (FMNB - Free Report) witnessed an upward earnings estimate revision of 3.8% for 2021 in the past month. Its shares have declined 19.5% so far this year. At present, it sports a Zacks Rank of 2.
T. Rowe Price Group, Inc. (TROW - Free Report) has witnessed 4.8% upward earnings estimate revision for 2021 in the past 30 days. Its shares have appreciated 22.7% so far this year. It currently carries a Zacks Rank of 2.
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Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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Here's What Makes Invesco (IVZ) a Promising Investment Bet
Despite challenges stemming from coronavirus-induced crisis, it seems to be a wise idea to add Invesco Ltd. (IVZ - Free Report) stock to your portfolio. The company benefits from organic growth and global diversification efforts. Further, the company's solid balance sheet gives it a strong footing.
Moreover, the company is witnessing upward earnings estimate revisions lately, reflecting analysts’ optimism regarding its earnings growth potential. In the past 60 days, the Zacks Consensus Estimate for earnings moved 1.8% and 1% upward for 2020 and 2021, respectively. The stock currently sports a Zacks Rank #1 (Strong Buy).
Shares of Invesco have jumped 54.1% in the past three months, outperforming the industry's 23.5% rally.
Mentioned below are some key factors that make Invesco stock an attractive investment option now.
Earnings: Over the past three to five years, Invesco’s earnings have witnessed a decline of 1.6%. Though the same trend is likely to persist this year (the company’s earnings are projected to decline 32.6it is expected to get reversed in 2021. The company is projected to witness earnings growth of 19.7% for 2021.
The company’s earnings for the long term are expected to grow at the rate of 6%.
Revenue: Invesco’s total net revenues have witnessed a compound annual growth rate (CAGR) of 4.1% over the last six years (2014-2019). The increase was mainly driven by solid assets under management (AUM) balance and OppenheimerFunds buyout. AUM witnessed a CAGR of 9.1% over the last six years (2014-2019). Moreover, given a robust institutional pipeline, solid retail channel, and synergies from opportunistic acquisitions, revenues are expected to continue to improve in the quarters ahead.
Although sales are expected to fall 1.4% in 2020, the same is projected to grow 3.6% in 2021.
Balance Sheet Position: Invesco's robust balance sheet gives it strength. Although as of Sep 30, 2020, the company's total debt of $8.7 billion was higher than the cash and cash equivalents balance of $1.3 billion, its total debt to total capital of 37.7% at the end of the third quarter of 2020 improved sequentially. Moreover, its times interest earned of 8.1X improved sequentially and was above the industry average of 5.7X. These, along with the company’s earnings strength, imply that it will be able to meet interest and/or debt obligations if the economic situation worsens.
Global Diversification: Invesco's global footprint bodes well for the future. It maintains a solid foothold in Europe, Canada and the Asia-Pacific. As of Sep 30, 2020, the company’s client AUM outside the United States constituted 28.5% of total AUM. Further, the company's acquisitions of the leading U.K.-based advisor-focused digital solutions firm, Intelliflo, and Europe-based Source, a leading, independent specialist provider of ETFs, will boost its market share globally. This, along with its broad diversification will likely help the company generate further momentum from business in these regions.
Reasonable Valuation: Invesco looks undervalued right now compared with its broader industry. It currently has a price-to-earnings ratio of 10.03, lower than the industry average of 14.57. Also, its price-to-book ratio of 0.76 is below the industry’s 2.12.
Other Stocks to Consider
Federated Hermes, Inc. (FHI - Free Report) has witnessed an upward earnings estimate revision of 2.8% for 2021 over the past 30 days. Its shares have lost 13% so far this year. At present, it carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Farmers National Banc Corp. (FMNB - Free Report) witnessed an upward earnings estimate revision of 3.8% for 2021 in the past month. Its shares have declined 19.5% so far this year. At present, it sports a Zacks Rank of 2.
T. Rowe Price Group, Inc. (TROW - Free Report) has witnessed 4.8% upward earnings estimate revision for 2021 in the past 30 days. Its shares have appreciated 22.7% so far this year. It currently carries a Zacks Rank of 2.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>