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Eaton Vance Closes Assets Acquisition of Calvert Investment

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Eaton Vance Corp. EV closed the acquisition of the business assets of Calvert Investment Management, Inc., a major player in responsible investing. Terms of the transaction remained undisclosed.

According to a statement released last Friday, the acquisition was completed through a newly-formed Eaton Vance subsidiary – Calvert Research and Management. President and Chief Executive Officer of Calvert Investments – John Streur – will take up the same position at Calvert Research and Management. This unit will be focused on building the Calvert brand and legacy, in a bid to attain a leading global position in responsible investment management.

Bethesda, MD-based Calvert Investments, founded in 1976, is an indirect subsidiary of Ameritas Holding Company.  The company “seeks to invest in companies that provide positive leadership in their business operations and overall activities that are material to improving societal outcomes.”

With a large and diversified portfolio, the Calvert mutual funds cover actively and passively managed equity, fixed income and asset allocation strategies. As of Oct 31, 2016, the company had $12.1 billion of fund and separate account assets under management.

During the announcement of the deal in Oct 2016, Laurie G. Hylton – Vice President and Chief Financial Officer of Eaton Vance – had stated that the acquisition of Calvert Investments offers considerable benefits to Eaton Vance shareholders. Hylton also stated that considering the acquired operations’ profitability and anticipated cost savings, the acquisition is likely to be immediately accretive.

Driven by its financial strength, Eaton Vance remains focused on efficient capital deployment activities. Apart from growing business through organic and inorganic routes, this Boston, MA-based global asset manger remains committed to enhance shareholders’ value through share buybacks and dividend payments. In fact, in Oct 2016, the company announced a 6% increase in its quarterly common stock dividend to 28 cents per share, marking the 36th consecutive fiscal year of dividend hike by the company.

Stock Performance

Shares of Eaton Vance surged 32% in a year’s time, significantly outpacing the 5.1% gain for the Zacks categorized Investment Management industry. The stock is likely to keep performing well in the quarters ahead on the back of numerous positives in the company’s fundamentals, including benefit from continued investor demand for fixed income, higher interest rates that should support the bank loan franchise and potential lower taxes under Donald Trump’s administration. However, escalating costs remain one of the key concerns.


Eaton Vance carries a Zacks Rank #3 (Hold).

Stocks to Consider

E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for 2016 moved up 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Meta Financial Group, Inc. CASH: Over the last 60 days, the Zacks Consensus Estimate jumped 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.

Ameriprise Financial, Inc. AMP: The Zacks Consensus Estimate for 2016 increased slightly to $9.16 for 2016 and to $10.37 for 2017, over the past 60 days. The company carries a Zacks Rank #2. (Buy)

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