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4 Reasons Why BlackRock (BLK) Stock is Worth a Buy Right Now

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During the Q2 earnings season, the Finance sector was one of the best performers. Despite inflation-related issues and increasing chances of political uncertainty, we can add some asset managers to our portfolio based on strong fundamentals and solid long-term growth opportunities.

BlackRock, Inc. (BLK - Free Report) is one such stock which not only recorded an average positive earnings surprise of 1.92% over the trailing four quarters, but has also been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 30 days, the Zacks Consensus Estimate for both 2017 and 2018 inched up slightly.

Further, shares of this Zacks Rank #2 (Buy) stock have gained 18.5% so far, this year, compared with 22.7% growth recorded by the industry it belongs to.



Notably, BlackRock has a number of other aspects that make it an attractive investment option right now.

Why BlackRock is a Must Buy

Earnings Per Share (EPS) Growth: In the last three to five years, BlackRock witnessed EPS growth of 8.8%, driven by solid global presence that allows broad diversification and organic growth. The company’s earnings are projected to grow 13.8% and 14.1% in 2017 and 2018, respectively.

Further, its long-term (three to five years) expected EPS growth of 11.9% promises reward for shareholders.

Revenue Strength: BlackRock’s revenues (on GAAP basis) witnessed a five-year CAGR of 4.5% (2012-2016), with the trend continuing in the first half of 2017. Also, the top line is anticipated to grow nearly 9.2% in 2017, considerably higher than the industry average of 3.8%. This indicates its superiority in generating revenues.

Impressive Capital Deployment Activities: Driven by its capital strength, BlackRock’s capital deployment activities are impressive. In January, the company announced a 9% dividend hike and it has a share buyback plan in place. With a sturdy capital position, the company will likely continue rewarding shareholders through strategic capital deployment.

Strategic Acquisitions: BlackRock has expanded primarily via acquisitions, with majority of its assets under management (AUM) growth driven by the same. Recently, it acquired the First Reserve Energy Infrastructure Funds and completed the deal to acquire financial technology provider — Cachematrix, while it has acquired several global and domestic firms over the years. All these are anticipated to support the company’s AUM growth.

Other Stocks to Consider

Other top-ranked stocks in the same space are BancFirst Corporation (BANF - Free Report) , sporting a Zacks Rank #1 (Strong Buy), while M&T Bank Corporation (MTB - Free Report) and Wintrust Financial Corporation (WTFC - Free Report) carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

BancFirst Corporation’s earnings estimates have been revised 1.1% upward for 2017, in the past 60 days. Also, its share price has soared 59.9% over the last year.

M&T Bank’s earnings estimates for 2017 have been revised slightly upward, over the last 30 days. Further, in a year’s time, the company’s shares have jumped 36.6%.

Wintrust Financial’s earnings estimates have been revised 4.9% upward for 2017, in 90 days’ time. Also, its share price surged 41.6% over the past year.

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