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4 Reasons to Add BlackRock (BLK) Stock to Your Portfolio Now

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It seems to be a wise idea to add BlackRock, Inc. (BLK - Free Report) stock to your portfolio now. The company's initiatives to restructure the active equity business are expected to continue to support its top-line growth. Moreover, its inorganic growth efforts bode well for the future.

The Zacks Consensus Estimate for BLK’s current-year earnings has been revised 1% upward over the past 60 days, reflecting analysts’ optimism regarding its earnings growth potential. Thus, the company currently carries a Zacks Rank #2 (Buy).

Looking at its price performance, shares of BLK have gained 13.1% in the past six months, outperforming 10.1% growth recorded by the industry.

 

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A few other aspects that make BlackRock an attractive investment option right now are mentioned below.

Earnings Growth: In the last three to five years, the company witnessed earnings per share (EPS) growth of 11.4%, higher than the industry’s rise of 9.2%. While BlackRock’s earnings are projected to decline 1.5% in 2023, the same is expected to grow 13.4% in 2024.

Further, the company’s long-term (three to five years) expected EPS growth rate of 8.6% promises reward for investors.

Revenue Strength: Driven by a solid global presence, broad product diversification and steadily improving assets under management (AUM) balance, BlackRock’s revenues (on a GAAP basis) witnessed a seven-year (2016-2022) CAGR of 6.5%.

Given the company’s efforts to strengthen the iShares and ETF operations, and increased focus on the active equity business, its top line is expected to be positively impacted in the quarters ahead. In 2023 and 2024, BLK’s revenues are projected to grow 1.5% and 9.2%, respectively.

Inorganic Growth Efforts: Supported by a solid balance sheet position, BlackRock has expanded inorganically, which bodes well for the future. In June 2021, it acquired the Climate Change Scenario Model of Baringa Partners. In February 2021, it completed the acquisition of investment management services provider, Aperio Group.

Apart from these, over the years, the company has acquired several firms across the globe, thus expanding its footprint and market share. With a strong liquidity position, the company is well-positioned to grow further through buyouts.

Superior Return on Equity (ROE): The company’s ROE of 14.38% is higher than the industry average of 12.92%. This shows that it reinvests its cash more efficiently than its peers.

Other Stocks to Consider

A couple of other top-ranked stocks from the finance space are The Bank of New York Mellon Corporation (BK - Free Report) and First Horizon Corporation (FHN - Free Report) . Both companies currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings estimates for BK have been revised 2.5% upward for 2023 over the past 60 days. BNY Mellon’s share price has rallied 9.8% over the past six months.

First Horizon’s earnings estimates have been revised upward by 1% for the current year over the past 60 days. In six months’ time, FHN’s share price has declined 23.7%.


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The Bank of New York Mellon Corporation (BK) - free report >>

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