Finance sector has been one of the best performers in second-quarter earnings. So, today we bring SEI Investments Co. (SEIC - Free Report) from the sector for you to consider. This investment management company reflects strong fundamentals and solid growth prospects.
Diversified product and revenue mix, strong global presence, enhanced capital deployment and robust asset inflows make this Zacks Rank #2 (Buy) stock an attractive pick. Analysts seem to be optimistic about the company’s prospects as the stock is witnessing solid upward estimate revisions.
Also, its shares have rallied 13.2% over the last six months, marginally outperforming the industry’s gain of 12.4%.
Why SEI Investments is a Solid Pick?
Revenue Growth: SEI Investments has been witnessing consistent improvement in revenues for the past few years. Over the last five years (2012–2016), the company’s revenues recorded a CAGR of 9%. The company’s projected sales growth of 7.8% and 8.5% for 2017 and 2018, respectively, ensures continuation of the upward trend in top line.
Earnings Per Share Strength: Over the past three to five years, SEI Investments witnessed earnings per share (EPS) growth of 14.4%, justifying the two-fold jump in share price in those five years.
The earnings momentum is expected to continue in the near term as reflected by the company’s projected EPS growth of 13% for 2017 and 14.7% for 2018. Also, the company’s long-term (three to five years) estimated EPS growth rate of 12% promises rewards for investors.
Robust Asset Base: Asset inflows at SEI Investments remain strong. The company registered a rising trend in its total assets under management and administration over the last four years at a CAGR of 10.3% (2011–2015). Though the overall equity market remains volatile, this investment manager is well positioned to benefit from the same.
Steady Capital Deployment: SEI Investments continues to impress with its enhanced capital deployment activities. In Dec 2016, the company increased its semi-annual dividend by 7% and increased its share buyback authorization by additional $200 million. Driven by a strong balance sheet position, the company is expected to continue deploying capital meaningfully.
Strong Leverage: SEI Investments has no debt compared with the industry’s debt/equity ratio of 0.09. This reflects relatively strong financial health of the company, which will help it perform better than its peers under a dynamic business environment.
Other Stocks to Consider
Some other stocks in the same space worth considering are Ameriprise Financial, Inc. (AMP - Free Report) , T. Rowe Price Group, Inc. (TROW - Free Report) and AllianceBernstein Holding L.P. (AB - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameriprise has witnessed an upward earnings estimate revision of 4% for 2017, over the past 30 days. Its share price has risen 17.3%, over the last six months.
For T. Rowe Price, over the past 30 days, its Zacks Consensus Estimate has been revised 2% upward for 2017. Its share price has increased 19.1% over the last six months.
AllianceBernstein has witnessed an upward earnings estimate revision of 2.5% for 2017, over the past 30 days. Over the last six months, its share price is up 2.7%.
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