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Is it Advisable to Add Federated (FII) to Your Portfolio?
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With record equity assets of $67.1 billion and 4% year-over-year growth in earnings per share in Q3, Federated Investors, Inc. can be a solid bet now. The company’s diversified asset and product mix, along with the continued acquisition of money market assets amid volatile markets, is anticipated to yield upbeat results.
In addition, the impending interest rate hike is likely to stabilize the top line further, in turn, creating a buying opportunity for long-term horses. Though compliance-related fees continue to escalate for Federated, given the strictly regulated nature of investment management business, sharper focus on restructuring the product line and merging certain funds is likely to make the growth path smoother.
With $363.7 billion in managed assets as of Sep 30, 2017, Federated is one such stock which not only beat estimates in Q3, 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 2017 and 2018 increased 2.4% and 2.3%, respectively.
Additionally, shares of this Zacks Rank #1 (Strong Buy) stock have gained 16.2% in the past six months, almost at par with the growth recorded by the industry.
Notably, Federated has a number of other aspects that make it an attractive investment option.
5 Reasons Why Federated is a Must Buy
Earnings Per Share Strength: Federated witnessed earnings per share three-year (2014-2016) compounded annual growth rate (CAGR) of 19.6%. In addition, the company’s long-term (three-five years) estimated EPS growth rate of 5.1% promises rewards for investors over the long run. Also, it recorded an average positive earnings surprise of 4.47% over the trailing four quarters.
Strategic Deals: Under the prevailing pressure for money-market funds, acquiring money market assets depicts buoyancy of the company in the money-market business. Over the past three years, Federated has acquired more than $9 billion of money-market assets. Furthermore, in the last few years, it has inked strategic deals, and thereby expanded operations in the U.K. and Chile. Notably, the company continues to seek alliances and acquisitions to expand its business in Europe and the Asia-Pacific region, as well as the United States and rest of the Americas.
Strong Leverage: Federated’s debt/equity ratio is 0.27 compared to the S&P 500 average of 0.70, indicating relative lower debt burden. It highlights the financial stability of the company even in an unstable economic environment.
Superior Return on Equity (ROE): Federated’s ROE of 34.54%, as compared with the industry average of 12.92%, reflects the company’s commendable position over its peers.
Steady Capital Deployment: Federated remains focused on managing capital levels efficiently. In February 2015, the company raised its share repurchase authorization to an additional 4 million shares. Also, the company has been regularly paying dividends of 25 cents per share each quarter, following a 4% hike in July 2013. Notably, in October 2016, it announced a special dividend of $1.00 per share which marked the fourth special dividend in eight years. Further, the company announced a new share repurchase program, under which it will buy back up to 4 million additional shares of class B common stock.
Other Stocks to Consider
Ameriprise Financial, Inc. (AMP - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 30%. It carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cohen & Steers, Inc. (CNS - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped more than 12% over the past six months. It has a Zacks Rank of 2.
Lazard Ltd. (LAZ - Free Report) has been witnessing upward estimate revisions for past month. Also, the company’s shares have risen nearly 5.7% over the last six months. It presently holds a Zacks Rank of 2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Is it Advisable to Add Federated (FII) to Your Portfolio?
With record equity assets of $67.1 billion and 4% year-over-year growth in earnings per share in Q3, Federated Investors, Inc. can be a solid bet now. The company’s diversified asset and product mix, along with the continued acquisition of money market assets amid volatile markets, is anticipated to yield upbeat results.
In addition, the impending interest rate hike is likely to stabilize the top line further, in turn, creating a buying opportunity for long-term horses. Though compliance-related fees continue to escalate for Federated, given the strictly regulated nature of investment management business, sharper focus on restructuring the product line and merging certain funds is likely to make the growth path smoother.
With $363.7 billion in managed assets as of Sep 30, 2017, Federated is one such stock which not only beat estimates in Q3, 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 2017 and 2018 increased 2.4% and 2.3%, respectively.
Additionally, shares of this Zacks Rank #1 (Strong Buy) stock have gained 16.2% in the past six months, almost at par with the growth recorded by the industry.
Notably, Federated has a number of other aspects that make it an attractive investment option.
5 Reasons Why Federated is a Must Buy
Earnings Per Share Strength: Federated witnessed earnings per share three-year (2014-2016) compounded annual growth rate (CAGR) of 19.6%. In addition, the company’s long-term (three-five years) estimated EPS growth rate of 5.1% promises rewards for investors over the long run. Also, it recorded an average positive earnings surprise of 4.47% over the trailing four quarters.
Strategic Deals: Under the prevailing pressure for money-market funds, acquiring money market assets depicts buoyancy of the company in the money-market business. Over the past three years, Federated has acquired more than $9 billion of money-market assets. Furthermore, in the last few years, it has inked strategic deals, and thereby expanded operations in the U.K. and Chile. Notably, the company continues to seek alliances and acquisitions to expand its business in Europe and the Asia-Pacific region, as well as the United States and rest of the Americas.
Strong Leverage: Federated’s debt/equity ratio is 0.27 compared to the S&P 500 average of 0.70, indicating relative lower debt burden. It highlights the financial stability of the company even in an unstable economic environment.
Superior Return on Equity (ROE): Federated’s ROE of 34.54%, as compared with the industry average of 12.92%, reflects the company’s commendable position over its peers.
Steady Capital Deployment: Federated remains focused on managing capital levels efficiently. In February 2015, the company raised its share repurchase authorization to an additional 4 million shares. Also, the company has been regularly paying dividends of 25 cents per share each quarter, following a 4% hike in July 2013. Notably, in October 2016, it announced a special dividend of $1.00 per share which marked the fourth special dividend in eight years. Further, the company announced a new share repurchase program, under which it will buy back up to 4 million additional shares of class B common stock.
Other Stocks to Consider
Ameriprise Financial, Inc. (AMP - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 30%. It carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cohen & Steers, Inc. (CNS - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped more than 12% over the past six months. It has a Zacks Rank of 2.
Lazard Ltd. (LAZ - Free Report) has been witnessing upward estimate revisions for past month. Also, the company’s shares have risen nearly 5.7% over the last six months. It presently holds a Zacks Rank of 2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>