Invesco Ltd. (IVZ - Free Report) offers a profitable investment opportunity driven by steady earnings growth and a strong liquidity position.
Analysts also seem to be optimistic about its growth prospects as evident from the upward estimate revisions. Over the last 30 days, the Zacks Consensus Estimate for the current year was revised 2% upward.
Further, this Zacks Rank #2 (Buy) stock has rallied 19.6% in the last three months, outpacing the Zacks categorized Investment Management industry’s gain of 10.1%.
Invesco has a number of other aspects that make it an attractive investment option.
Earnings Per Share (EPS) Growth: In the last three to five years, Invesco witnessed EPS growth of 13.9%, driven by strong global presence and organic growth. The company’s earnings are projected to grow 13.6% and 10.7% in 2017 and 2018, respectively.
Further, its long-term (three to five years) expected EPS growth of 12.2% promises reward for shareholders.
Revenue Strength: Invesco’s net revenues witnessed a five-year CAGR of 4.6% (2012–2016). The company’s diverse product offerings and alternative investment strategies should continue to attract investors, which will support top-line growth in the upcoming quarters. Top line is expected to grow nearly 5.4% in 2017, higher than the industry average of 4%. This indicates its superiority in generating revenues.
Steady Assets Under Management (AUM) Growth: Invesco’s AUM has consistently demonstrated strong growth, aided by increasing net inflows. Over the last five years (2012–2016), total AUM has seen a CAGR of 5.1%. The growth trajectory should continue to be driven by the company’s diversified products, revenue mix and growing demand for passive products and alternate asset classes.
Expense Management: Invesco’s operating expenses have been declining over the past few years, driven by its initiative – Business Optimization. The company remains on track to achieve annualized run-rate savings of approximately $50 million.
Stock Seems Undervalued: With respect to PEG ratio, Invesco looks relatively undervalued. The company’s PEG ratio of 1.17 is below the industry average of 1.49.
Superior Return on Equity (ROE): Invesco has an ROE of 11.97%, better than the industry average of 10.74%. This shows that the company reinvests its cash more efficiently.
Other Stocks to Consider
Some other stocks in the same industry worth considering include Eaton Vance Corp. (EV - Free Report) , Artisan Partners Asset Management Inc. (APAM - Free Report) and Woori Bank Co., Ltd. (WF - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Eaton Vance was revised 3.3% upward for the current year, in the last 60 days. The company’s share price has increased 30.8% in the last one year.
Artisan Partners Asset witnessed an upward earnings estimate revision of 1.7% for the current year, in the last 60 days. Its share price has increased 8.6% over the last one year.
Woori Bank witnessed an upward earnings estimate revision of 18.8% for the current year, in the last 60 days. Over the last one year, its share price has jumped 91%.
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