BlackRock is a leading financial services company in the world. Its diversified platform comprises the alpha-seeking active, index and alternative products, as well as enhanced distribution and portfolio construction technology offerings. Its portfolio is well suited for clients seeking varied investment objectives across a wide risk spectrum including money markets, indexes, fixed income, multi-assets and even illiquid alternatives like infrastructure, private credit, and real estate, etc.
BlackRock manages $6 trillion worth of assets across markets globally. Its asset mix is comprised of equity (50% of the portfolio), fixed income (32%), multi-asset (8%), cash (8%) and alternatives (2%). Its iShares continue to retain the number one market share of the global ETF industry flows.
BlackRock serves a diverse mix of institutional and retail clients across the globe. The company serves clients in more than 100 countries across the globe, including the US, the UK and Japan. It has more than 4000 funds and over 30,000 Aladdin users.Investment Data
- Opportunity Score: 68
- Ticker: NYSE:BLK
- Sector: Financial Services
- Industry: Asset Management
- Market Cap: 83.07B
- P/E: 18.83
- Dividend Yield: 2.47
- Dividend Payout Ratio: 46.43
- Chowder Score: Dividend Snapshot Members Only
- 3, 5, 10-year Revenue Growth: Dividend Snapshot Members Only
- 3, 5, 10-year Dividend Growth: Dividend Snapshot Members Only
Revenue Growth & Market Exposure
Investors choose BlackRock for its diversified investment platforms, technologies, and customized financial solutions. BlackRock registered a 4% organic asset growth on an average over the last five years generating $1 trillion of net inflows.
BlackRock is a leader in driving the digitization of asset management aggressively. Its Aladdin is an in-house comprehensive operating system that offers risk analytics, comprehensive portfolio management, trading as well as operations to its clients. BlackRock’s Cachematrix is also driving broader distribution opportunities for its cash strategies. These smart technology platforms position the company better to drive future asset management flows. These initiatives have helped the company to compound its technology services revenue by 11% average growth rate annually, over the last five years.
BlackRock has been investing in its platforms and technologies to help people make better financial decisions for the last three decades. It has developed an understanding of its clients’ needs, while also developing local market expertise. The company is in a good position to benefit from the growing demand for investment management.
As the average lives of people get longer, there is a greater need for prudent financial investment. There is a huge demand for financial services in Asia and Latin America as these regions witness rising income levels and significant wealth creation. BlackRock’s globally diverse investment and technology platform should help the company gain from these emerging trends.
The growing need for asset management poses significant growth opportunities for BlackRock. The global industry AUM is expected to grow by $30 trillion to $125 trillion in the next four years, while the US market alone is expected to expand by 6% CAGR in the future. Leading economies like Asia-Pacific, Europe, and Latin America are estimated to grow in the high single to low double-digit range in the future.
BlackRock is a dividend starter but has an impressive double-digit dividend CAGR track record. Its 10-year dividend growth rate is 14.4% CAGR. The company has an annual average yield of 2.9% and a reasonable dividend payout ratio of 50%. It paid $1.9 billion in cash dividends and repurchased $1.7 billion worth of shares in the last year. Its latest dividend hike was 5% to $3.30 per share.
The company is highly diversified in terms of style, product, client and geography, which enables it to generate stable cash flows through all market cycles. Most of its revenue comprises of performance fees and fees earned as a percentage of AUM. BlackRock has grown its AUM, and technology and risk management revenues by 66% and 74% respectively, since 2012.
A diverse platform, comprehensive solutions, and improving technologies are BlackRock’s key competitive advantages. Given an extensive experience in the finance industry and a rock solid reputation, BlackRock has become a preferred partner for clients to meet their specified objectives and provide customized solutions.
BlackRock is focusing on leveraging its scale and technology to drive value creation for clients and establishing a strong market position. The company is in a good position to benefit from significant long term growth opportunities. The global ETF industry AUM is growing and is expected to reach $12 trillion in assets by 2023, while the APAC industry AUM is expected to grow faster than global AUM. Given its leading market size and irrefutable reputation, BlackRock is favorably placed to gain from these growth patterns.
BlackRock competes with investment management firms, mutual funds, insurance companies, banks, brokerage firms, and other financial institutions. Its ability to provide a complete set of investment strategies along with leading portfolio construction technologies sets it apart from peers. Brookfield Asset Management, which is a leading global alternative asset management company is BlackRock’s biggest competitor.
|Ticker||Company||Sector||Industry||Score||Quote||Market Cap||PE||FPE||EPS||Yield||Payout Ratio||Payments||Dividend||Chowder||Ambassador||Achiever||Aristocrat||King||Graph|
|SPGI||S&P Global Inc||Financial Services||Brokers & Exchanges||51||296.79||72.54||35.22||18.51||8.43||0.77||27.05||4||2.28||9.32||NO||YES||YES||NO||1|
|CB||Chubb Corporation||Financial Services||Insurance - Property & Casualty||63||153.69||69.65||19.45||18.51||7.90||1.95||37.97||4||3.00||4.87||YES||YES||YES||NO||1|
|AFL||Aflac||Financial Services||Insurance - Life||57||53.42||39.21||13.19||18.51||4.05||2.02||26.67||4||1.08||9.95||NO||YES||YES||NO||1|
|TROW||T. Rowe Price Group, Inc.||Financial Services||Asset Management||68||132.26||30.91||16.79||18.51||7.88||2.30||38.58||4||3.04||12.71||NO||YES||YES||NO||1|
|CINF||Cincinnati Financial Corp||Financial Services||Insurance - Property & Casualty||52||107.31||17.53||19.38||18.51||5.54||2.09||40.43||4||2.24||5.20||NO||YES||YES||YES||1|
|BEN||Franklin Resources, Inc.||Financial Services||Asset Management||70||25.74||12.85||10.96||18.51||2.35||4.20||45.96||4||1.08||18.11||YES||YES||YES||NO||1|
|PBCT||People's United Financial Inc.||Financial Services||Banks||64||16.05||7.13||12.59||18.51||1.27||4.42||55.91||4||0.71||5.90||NO||YES||YES||NO||1|
BlackRock is strategically positioned to benefit from the rising demand for asset management and wealth services given its reputation of a leading diversified global asset management and technology services firm. Diversified investment platforms, technologies, and powerful financial solutions are its biggest competitive advantages. BlackRock enjoys leading market share positions in the global ETF market. The company’s scale and strategic position have supported its organic and revenue growth, as well as operating leverage. BlackRock’s commitment to investing in its platform will drive long-term value creation for its shareholders in the future.
BLK is not quite underperforming the S&P 500 index but it’s not beating it consistently either. With that said, the dividend yield is generous compared with the indexes and the company is in the money business.
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.