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Why Invesco (IVZ) is Worth Adding to Your Portfolio Now

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Backed by a solid liquidity position and steady earnings growth, Invesco (IVZ - Free Report) seems to be a good investment option now. Moreover, its increasing global presence, broad diversification and inorganic growth efforts are positives.

Analysts seem to be optimistic about its prospects as evident from the upward estimate revisions. Over the past 30 days, the Zacks Consensus Estimate for earnings for 2019 has been revised 3% upward. Thus, the stock has a Zacks Rank #2 (Buy).

Nevertheless, shares of the company have lost 5% so far this year against 8.9% growth recorded by the industry. Given the positive estimate revisions and solid Zacks Rank, its price performance is expected to improve in the future.



Here are other aspects that make Invesco an attractive investment option:

Earnings growth: In the past three to five years, Invesco witnessed earnings growth of 0.5%, driven by strong global presence and organic growth. The company’s earnings are projected to grow 0.5% and 11.2% in 2019 and 2020, respectively.

Further, its long-term (three to five years) expected earnings growth rate of 8.40% promises reward for shareholders.

Revenue strength: Invesco’s net revenues witnessed a five-year CAGR of 1.4% (2014-2018). The company’s diverse product offerings and alternative investment strategies will continue to attract investors, in turn supporting top-line growth in the upcoming quarters.

Also, the company has been growing thorough acquisitions. Further, its projected sales growth rate of 19.4% for 2019 and 11.7% for 2020 indicates continuation of the momentum.

Steady Assets Under Management (AUM) growth: Invesco’s AUM has consistently demonstrated strong growth. Though total AUM declined in 2018 owing significant market volatility, over the last five years (2014-2018) the same recorded a CAGR of 2.9%. The acquisition of OppenheimerFunds in May 2019 resulted in further rise in the company’s AUM, making it one of the leading global asset managers.

Stock seems undervalued: Invesco looks undervalued with respect to its price/book and price/earnings (F1) ratios. The company has a P/B ratio of 0.71, which is below the industry average of 1.52. Also, its P/E (F1) ratio, which is currently 6.57 is lower than the industry average of 11.36.

Also, the stock has a Value Score of A. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.

Other Stocks to Consider

The Zacks Consensus Estimate for T. Rowe Price (TROW - Free Report) has moved 1.2% upward for 2019 in the past 30 days. Shares of this Zacks Rank #1 company have returned 18.3% year to date.

The Zacks Consensus Estimate for Ameriprise Financial, Inc. (AMP - Free Report) has been revised 1% upward for 2019 in the past 30 days. Its share price has risen 23.2% so far this year. The stock carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Federated Investors, Inc. has been revised 1.6% upward for 2019 in the past 30 days. The company’s share price has rallied 23% so far this year. The company has a Zacks Rank of 2.

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