Invesco (IVZ - Free Report) remains well-positioned for growth, given its efforts to capitalize on investors’ demand for passive and alternative investment strategies. Moreover, solid assets under management (AUM) balance and increasing global presence will likely aid the company’s financials.
Notably, analysts seem to be optimistic regarding its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 1% upward. The consensus estimate for its 2020 earnings has been revised 1.9% upward over the same period. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 10.3% over the past three months compared with 12.4% growth recorded by the industry.
Given the positive estimate revisions and a solid Zacks Rank, Invesco’s price performance is expected to improve in the future.
Here are some other aspects that make the company an attractive investment option right now:
Earnings Growth: Over the past three to five years, Invesco witnessed earnings growth of 0.3%, driven by strong global presence and organic growth. The company’s earnings are projected to grow 7.4% and 3.9% in 2019 and 2020, respectively.
Further, its long-term (three to five years) expected earnings growth rate of 8.3% 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, thus supporting top-line growth in the upcoming quarters.
Also, it has been growing through acquisitions. The company’s projected sales growth rates of 17.7% for 2019 and 11.8% for 2020 indicate the continuation of the upward trend in revenues.
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 witnessed 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 currently looks undervalued with respect to its price/book and price/earnings (F1) ratios. The company has a P/B ratio of 0.82, which is below the industry average of 1.43. Also, its P/E (F1) ratio of 6.88 is lower than the industry average of 12.41.
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
A few other top-ranked stocks from the same space are mentioned below. All these stocks currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for earnings of T. Rowe Price (TROW - Free Report) has moved marginally upward for 2019 over the past 60 days. Shares of the company have gained 9.3% over the past three months.
The consensus estimate for earnings of Waddell & Reed (WDR - Free Report) has been revised 1.2% upward for the current year over the past 60 days. Its share price has increased 1% over the past three months.
The consensus estimate for Federated Investors, Inc has been revised nearly 1% upward for 2019 over the past 60 days. The company’s share price has rallied 3.7% over the past three months.
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 >>