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Why AllianceBernstein (AB) is Worth Adding to Your Portfolio
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It seems to be a wise idea to add AllianceBernstein Holding L.P. (AB - Free Report) stock to your portfolio now, given its strong fundamentals and promising prospects. Solid assets under management (AUM) balance is likely to aid the company’s profitability further.
While the Zacks Consensus Estimate for 2019 earnings has remained unchanged, the same for 2020 has moved 1.1% upward over the past 30 days. This reflects analysts’ optimism about its earnings growth potential.
Also, this Zacks Rank #2 (Buy) stock has gained 5.8% in a month’s time, outperforming the industry’s growth of 3.2%. Factors Favoring AllianceBernstein
Revenue Growth: Organic growth remains a key strength for AllianceBernstein. The top line witnessed a four-year compound annual growth rate of 3.7% (2015-2018). Steady improvement in the AUM balance is likely to further support the top line.
Moreover, in April, the company acquired U.K.-based global financial service provider, Autonomous Research. The deal further expanded its global reach. Also, its projected sales growth rate of 8.1% for 2020 indicates continuation of the momentum.
Earnings Strength: AllianceBernstein witnessed earnings growth of 8.9% in the last three to five years. This trend is likely to continue in the near term as reflected by the company’s long-term (three to five years) estimated earnings growth rate of 6.8%, which promises rewards for investors. Also, its projected earnings growth rate for 2020 is 20%.
Superior Return on Equity (ROE): AllianceBernstein has an ROE of 15.18%, better than the industry average of 12.28%. This shows that the company reinvests its cash more efficiently.
Favorable VGM Score: AllianceBernstein has a VGM Score of B. Our research shows stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Strong Leverage: AllianceBernstein’s debt/equity ratio is nil compared with the industry average of 0.29, indicating relatively no debt burden. It highlights the company’s financial stability even in an unstable economic environment.
Federated Investors, Inc.’s earnings estimates for 2019 have moved slightly upward in the past 30 days. Further, the company’s shares have gained 23.7% over the trailing 12-month period. At present, it holds a Zacks Rank of 2.
BlackRock, Inc. (BLK - Free Report) has witnessed marginal upward earnings estimate revision for 2019 in the past 30 days. Additionally, the stock has gained 27.5% in the past year. It currently carries a Zacks Rank #2.
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This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
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Why AllianceBernstein (AB) is Worth Adding to Your Portfolio
It seems to be a wise idea to add AllianceBernstein Holding L.P. (AB - Free Report) stock to your portfolio now, given its strong fundamentals and promising prospects. Solid assets under management (AUM) balance is likely to aid the company’s profitability further.
While the Zacks Consensus Estimate for 2019 earnings has remained unchanged, the same for 2020 has moved 1.1% upward over the past 30 days. This reflects analysts’ optimism about its earnings growth potential.
Also, this Zacks Rank #2 (Buy) stock has gained 5.8% in a month’s time, outperforming the industry’s growth of 3.2%.
Factors Favoring AllianceBernstein
Revenue Growth: Organic growth remains a key strength for AllianceBernstein. The top line witnessed a four-year compound annual growth rate of 3.7% (2015-2018). Steady improvement in the AUM balance is likely to further support the top line.
Moreover, in April, the company acquired U.K.-based global financial service provider, Autonomous Research. The deal further expanded its global reach. Also, its projected sales growth rate of 8.1% for 2020 indicates continuation of the momentum.
Earnings Strength: AllianceBernstein witnessed earnings growth of 8.9% in the last three to five years. This trend is likely to continue in the near term as reflected by the company’s long-term (three to five years) estimated earnings growth rate of 6.8%, which promises rewards for investors. Also, its projected earnings growth rate for 2020 is 20%.
Superior Return on Equity (ROE): AllianceBernstein has an ROE of 15.18%, better than the industry average of 12.28%. This shows that the company reinvests its cash more efficiently.
Favorable VGM Score: AllianceBernstein has a VGM Score of B. Our research shows stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Strong Leverage: AllianceBernstein’s debt/equity ratio is nil compared with the industry average of 0.29, indicating relatively no debt burden. It highlights the company’s financial stability even in an unstable economic environment.
Other Stocks to Consider
T. Rowe Price Group, Inc.’s (TROW - Free Report) 2019 earnings estimates have moved marginally north in a month’s time. Moreover, this Zacks #2 Ranked stock has rallied 31.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Federated Investors, Inc.’s earnings estimates for 2019 have moved slightly upward in the past 30 days. Further, the company’s shares have gained 23.7% over the trailing 12-month period. At present, it holds a Zacks Rank of 2.
BlackRock, Inc. (BLK - Free Report) has witnessed marginal upward earnings estimate revision for 2019 in the past 30 days. Additionally, the stock has gained 27.5% in the past year. It currently carries a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>