Invesco Ltd. ( IVZ Quick Quote IVZ - Free Report) is well positioned for growth, backed by its robust balance sheet, strategic acquisitions and improving assets under management (AUM) balance despite concerns related to mounting costs. Further, the company’s solid capital deployments seem sustainable.
In addition, analysts are bullish on the stock’s prospects. Over the past 30 days, the Zacks Consensus Estimate for earnings has moved 5.2% and 4.9% north for 2021 and 2022, respectively. Invesco carries a Zacks Rank of 2 (Buy), at present.
Also, shares of the company have surged 56.9% over the past six months, outperforming the
industry’s rally of 26.3%.
Mentioned below are some major factors that make Invesco stock an attractive pick now.
Earnings Growth: Invesco's earnings have declined at a rate of 2.9% in the past three to five years. However, the trend is likely to reverse in the upcoming period. The company's earnings are projected to jump 47.7% and 5.9% in 2021 and 2022, respectively. Besides, the company's earnings are anticipated to grow at a rate of 15.30% over the long run.
Moreover, Invesco has a decent earnings surprise history. The company's earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 7.44%.
Revenue Strength: Invesco’s net revenues have witnessed a compound annual growth rate (CAGR) of 4.3% in the last six years (2015-2020), largely driven by a rising AUM balance. Notably, its AUM balance saw a CAGR of 11.7% during the same time frame. Further, the company’s diverse product offerings, strategic buyouts and investment strategies will keep attracting investors, which will likely stoke revenue growth.
Also, business expansion initiatives are likely to keep driving Invesco’s top-line growth. Though revenues are projected to be down 14.9% this year, the same is anticipated to grow at a rate of 6.3% in 2022.
Solid Balance-Sheet Position: As of Mar 31, 2021, the company had a total debt of $8.8 billion, and cash and cash equivalents balance $1.2 billion. However, Invesco’s times interest earned of 12.7 improved sequentially, at the end of first-quarter 2021. Thus, given the decent earnings strength, it will be able to continue meeting debt obligations, even if the economic situation worsens. Steady Capital Deployments: Invesco has sustainable capital-deployment activities. This April, the company announced a 10% increase in quarterly dividend to 17 cents per share, after slashing it by 50% last year. Further, the company has a share repurchase plan in place. Though management hasn’t yet resumed buybacks, as of Mar 31, 2021, $732.2 million remained under the buyback authorization. Valuation Seems Favorable: Invesco looks undervalued when compared with the broader industry. Its current price/earnings (F1) of 9.43 and price/sales ratios of 2.00 are below the industry averages of 12.23 and 3.15, respectively. Also, the stock has a Value Score of B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. Other Stocks Worth Considering Synovus Financial Corp. ( SNV Quick Quote SNV - Free Report) has witnessed an upward earnings estimate revision of 3% for the current year over the past 30 days. Its shares have gained 56.9% over the past six months. The company sports a Zacks Rank #1 at present. You can see . the complete list of today’s Zacks #1 Rank stocks here Citizens Community Bancorp, Inc.’s ( CZWI Quick Quote CZWI - Free Report) 2021 earnings estimate moved 25.2% north in the past 30 days. Over the past six months, shares of the company have surged 47.4%. At present, it flaunts a Zacks Rank of 1. HomeTrust Bancshares, Inc. ( HTBI Quick Quote HTBI - Free Report) recorded an upward earnings estimate revision of 19% for the ongoing year in 30 days’ time. Shares of this bank have appreciated 50.4% over the past six months. The stock currently sports a Zacks Rank #1. Infrastructure Stock Boom to Sweep America
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