We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Carlyle (CG) Thrives on Organic Growth Amid High Costs
Read MoreHide Full Article
The Carlyle Group (CG - Free Report) is gaining from its organic efforts, evident by steady revenue growth and an increase in asset under management (AUM) balance. The company’s impressive capital distribution plan will boost investors’ confidence in the stock. However, a rise in expenses and a lower liquidity level are near-term concerns.
Carlyle has been benefiting from strong organic growth over the past several years. CG’s revenues witnessed a constant uptrend in the past few years. The company is focusing on scaling its investment platforms, building out infrastructure credit and real estate credit, and foraying into new avenues, such as insurance and capital markets. These efforts will continue to support revenue growth in the upcoming period.
Carlyle’s fee-earning AUM and total AUM have shown significant growth over the past few years. The company’s global presence and efforts to expand business are likely to continue aiding AUM's growth. In sync with this, in April 2022, the company entered into a strategic advisory services agreement with Fortitude Re, increasing the total AUM and fee-earning AUM by approximately $50 billion as of the same date. In May 2023, Fortitude announced an agreement to reinsure $28 billion of life and fixed annuity products, which resulted in an additional AUM of approximately $24 billion.
Also, Carlyle’s capital-distribution activities seem impressive. In April 2023, the company increased its quarterly dividend by 7.7% to 35 cents per share. Apart from regular dividend hikes, the company has a share repurchase program in place. In October 2021, the company authorized the repurchase of up to $400 million of common stock. In February 2024, the company increased the total repurchase authorization to $1.4 billion in shares. In the first quarter of 2024, the company repurchased 3.3 million shares of common stock. As of Mar 31, 2024, $1.2 billion worth of authorization remained available. Such capital-distribution activities seem sustainable, given the company’s consistent earnings strength.
Over the past six months, shares of the CG have gained 3.2% compared with the industry’s growth of 11.6%.
Image Source: Zacks Investment Research
Currently, Carlyle carries a Zacks Rank #3 (Hold).
Despite the above-mentioned tailwinds, the company has witnessed a constant rise in expenses over the past few years. Higher compensation-related expenses induced this rise. Inflationary pressures, additional investments in technology, and compensation costs are likely to weigh on the expense base to some extent. We project total expenses to see a CAGR of 15% by 2026.
As of Mar 31, 2024, Carlyle had a total debt of $8.8 billion. As of the same date, it held $1.7 billion of cash and cash equivalents and cash and cash equivalents held at consolidated funds. It also had full availability under a $1-billion revolving credit line. Thus, with limited liquidity, the company might not be able to meet its near-term debt obligations, especially if the economic situation worsens.
Stocks to Consider
Some better-ranked bank stocks are Bank of Marin Bancorp (BMRC - Free Report) and Northrim BanCorp, Inc. (NRIM - Free Report) .
Bank of Marin Bancorp’s earnings estimates for 2024 have been revised 4.8% upward in the past seven days. The company’s shares have gained 9.6% over the past month. At present, BMRC sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrim BanCorp’s 2024 earnings estimates have revised 12.2% upward in the past 60 days. The stock has gained 5.9% over the past six months. Currently, NRIM also sports a Zacks Rank #1.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Carlyle (CG) Thrives on Organic Growth Amid High Costs
The Carlyle Group (CG - Free Report) is gaining from its organic efforts, evident by steady revenue growth and an increase in asset under management (AUM) balance. The company’s impressive capital distribution plan will boost investors’ confidence in the stock. However, a rise in expenses and a lower liquidity level are near-term concerns.
Carlyle has been benefiting from strong organic growth over the past several years. CG’s revenues witnessed a constant uptrend in the past few years. The company is focusing on scaling its investment platforms, building out infrastructure credit and real estate credit, and foraying into new avenues, such as insurance and capital markets. These efforts will continue to support revenue growth in the upcoming period.
Carlyle’s fee-earning AUM and total AUM have shown significant growth over the past few years. The company’s global presence and efforts to expand business are likely to continue aiding AUM's growth. In sync with this, in April 2022, the company entered into a strategic advisory services agreement with Fortitude Re, increasing the total AUM and fee-earning AUM by approximately $50 billion as of the same date. In May 2023, Fortitude announced an agreement to reinsure $28 billion of life and fixed annuity products, which resulted in an additional AUM of approximately $24 billion.
Also, Carlyle’s capital-distribution activities seem impressive. In April 2023, the company increased its quarterly dividend by 7.7% to 35 cents per share. Apart from regular dividend hikes, the company has a share repurchase program in place. In October 2021, the company authorized the repurchase of up to $400 million of common stock. In February 2024, the company increased the total repurchase authorization to $1.4 billion in shares. In the first quarter of 2024, the company repurchased 3.3 million shares of common stock. As of Mar 31, 2024, $1.2 billion worth of authorization remained available. Such capital-distribution activities seem sustainable, given the company’s consistent earnings strength.
Over the past six months, shares of the CG have gained 3.2% compared with the industry’s growth of 11.6%.
Image Source: Zacks Investment Research
Currently, Carlyle carries a Zacks Rank #3 (Hold).
Despite the above-mentioned tailwinds, the company has witnessed a constant rise in expenses over the past few years. Higher compensation-related expenses induced this rise. Inflationary pressures, additional investments in technology, and compensation costs are likely to weigh on the expense base to some extent. We project total expenses to see a CAGR of 15% by 2026.
As of Mar 31, 2024, Carlyle had a total debt of $8.8 billion. As of the same date, it held $1.7 billion of cash and cash equivalents and cash and cash equivalents held at consolidated funds. It also had full availability under a $1-billion revolving credit line. Thus, with limited liquidity, the company might not be able to meet its near-term debt obligations, especially if the economic situation worsens.
Stocks to Consider
Some better-ranked bank stocks are Bank of Marin Bancorp (BMRC - Free Report) and Northrim BanCorp, Inc. (NRIM - Free Report) .
Bank of Marin Bancorp’s earnings estimates for 2024 have been revised 4.8% upward in the past seven days. The company’s shares have gained 9.6% over the past month. At present, BMRC sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrim BanCorp’s 2024 earnings estimates have revised 12.2% upward in the past 60 days. The stock has gained 5.9% over the past six months. Currently, NRIM also sports a Zacks Rank #1.