Since going public at $14 in October 1999, BlackRock (symbol BLK) has been a winner. The stock, which closed at $155 on July 9, has delivered an annualized return (including dividends) of 26.3% since its debut. The terrific performance reflects BlackRock's prodigious growth -- assets under management have climbed 34% a year over the past decade.
BlackRock is well diversified. The firm has 46% of its $3.4 trillion in assets in stock or balanced products, 32% in bond funds and 10% in money-market or similar products. This means that BlackRock can hold on to assets better than many when, say, investors get skittish and move their money from stocks into bonds and cash. The firm has customers all around the globe. And its broad mix of actively managed and indexed products should allow the firm to keep up with investor tastes. Thanks to the acquisition of the iShares brand in 2009, BlackRock is now the biggest provider of exchange-traded funds.
In addition to its core business, BlackRock licenses its proprietary risk-management technology, called Aladdin, to firms that want to monitor investments or assets. Some $9 trillion of assets, in addition to the money that BlackRock itself runs, are on the platform. This business accounted for just 10% of revenues in 2009, but growth prospects are excellent as investors focus more on risk.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Because of BlackRock's heady growth, its stock has historically commanded a higher price-earnings ratio than most asset managers, says Gabelli & Co. analyst Mac Sykes. Analysts expect earnings to grow 15% annually over the next few years, and the stock sells for 16 times estimated 2010 profits of $9.93 per share. Sykes thinks the shares can reach $230 in a year.
For more information, see Great Days at BlackRock and FUND WATCH: BlackRock Funds Worth A Look.
-
Georgia Could Be Latest State to Eliminate Income TaxesState Tax Eliminating the Georgia state income tax: Last-minute summer trend or permanent policy?
-
Biggest Winners and Losers in Trump's New Tax PlanTax Law Trump’s mega tax overhaul, known as the ‘One Big Beautiful Bill,’ has distinct winners and losers. Which group do you fall into?
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have TodayBerkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
Stock Market Today: Nasdaq Hits a New High as Nvidia SoarsA big day for Nvidia boosted the Nasdaq, but bank stocks created headwinds for the S&P 500.
-
If You'd Put $1,000 Into Procter & Gamble Stock 20 Years Ago, Here's What You'd Have TodayProcter & Gamble stock is a dependable dividend grower, but a disappointing long-term holding.
-
Stock Market Today: Trump's Copper Comments Cause a StirMarkets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
My Three-Day Rule for Investing: And If it Applies NowStock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Is It Time to Invest in Europe?Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have TodayGoogle parent Alphabet has been a market-beating machine for ages.
