Cohen & Steers ( CNS Quick Quote CNS - Free Report) is well poised for growth on the back of solid assets under management (AUM) balance and favorable markets. Moreover, a strong capital base and solid liquidity position bode well for the company. However, elevated expenses remain a concern.
Cohen &Steers has been recording decent revenue growth. Total revenues witnessed a five-year (2016-2020) compound annual growth rate (CAGR) of 5%. Also, its AUM balance saw a CAGR of 7.4% during the same time frame. Thus, as the markets continue to improve, a rising AUM balance will likely support the top line in the upcoming quarters. Further, the company’s diverse product offerings and investment strategies will keep attracting investors, which will likely stoke revenue growth.
Apart from this, the company’s capital-deployment initiatives look impressive. Cohen & Steers has been increasing its dividend annually since 2011, with the latest hike of 15.4% announced this February. Also, in November 2020, management announced a special dividend. Thus, given a robust liquidity positions and no debt, the company’s capital-deployment activities look sustainable.
Moreover, analysts seem optimistic regarding Cohen &Steers’ earnings growth potential. The Zacks Consensus Estimate for earnings has moved marginally and 2% upward for 2021 and 2022, respectively, over the past 30 days.
However, Cohen &Steers’ mounting expenses on account of rise in employee compensation and benefits expenses, and general and administrative might deter bottom-line growth in the upcoming period. Total expenses witnessed a CAGR of 11.4% over the five-year period ended 2020. Costs are likely to be elevated, given the company’s intention to make investments in technology.
Shares of this Zacks Rank #2 (Buy) company have appreciated 8.5% over the past three months, underperforming the
industry’s 14.8% rally. Other Worth Considering
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