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.
-
What Not to Do When Planning Your RetirementCommitting any of these four common mistakes can set you back in your golden years. Here's how to increase your chances of a successful retirement.
-
Thanksgiving 2024: How Grocery Taxes Impact Your Holiday Food BudgetFood Prices Some families are navigating high food prices influencing what’s on the table this Thanksgiving.
-
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.
-
Stock Market Today: Tech Leads Stocks to Broad-Based GainsRisk appetite came back with a vengeance as oil and bonds took a breather.
-
Microsoft, BlackRock Team Up to Invest in AI Infrastructure: What to KnowMicrosoft and BlackRock are joining forces to invest up to $100 billion in AI infrastructure. Here's what you need to know.
-
Stock Market Today: Stocks Retreat Ahead of Nvidia EarningsMarkets lost ground on light volume Wednesday as traders keyed on AI bellwether Nvidia earnings after the close.
-
Stock Market Today: Stocks Edge Higher With Nvidia Earnings in FocusNvidia stock gained ground ahead of tomorrow's after-the-close earnings event, while Super Micro Computer got hit by a short seller report.
-
Stock Market Today: Dow Hits New Record Closing HighThe Nasdaq Composite and S&P 500 finished in the red as semiconductor stocks struggled.
-
Stock Market Today: Stocks Pop After Powell's Jackson Hole SpeechFed Chair Powell's Jackson Hole speech struck a dovish tone which sent stocks soaring Friday.
