Thursday, July 12, 2012

Blackrock (BLK) 2012 Review

Blackrock Inc. provides investment management services (fixed income, equity and cash management) to institutional clients and individual investors worldwide as well as a family of open-end and closed-end mutual funds and offers risk management, investment system outsourcing and financial advisory services. 

The company has grown its earnings per share between 20-30% over the last five years and raised its dividend per share from $.40 in 2003 to $5.50 in 2011. In addition, BLK earned a 7-9% return on equity. Growth should continue as the company:

(1) introduces new financial services, especially ETF’s,

(2) expands globally,

(3) aggressively reduces costs,

(4) makes acquisitions.


(1) a large portion of its fees are performance based,

(2) a decline in the stock and/or bond markets will impact its fees,

(3) global economic uncertainty.

Blackrock is rated A by Value Line, has only 16% debt and its stock currently yields 3.3%.

Statistical Summary

Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2003
BLK 3.3% 15% 41% 7*
IND 2.0 9 26 NA

Debt/Equity ROE EPS Down Since 2002 Net Margin Value Line Rating
BLK 16% 11% 2 28% A
IND 31 21 NA 17 NA

*BLK has paid a dividend for only 9 years


Note: BLK stock made great initial progress off its March 2009 low, quickly surpassing the downtrend off the July 2008 high (straight red line) and the November 2008 trading high (green line). Long term the stock is in an uptrend (blue lines). Intermediate term, it is in a trading range (the green line is the lower boundary, the purple line the upper boundary). The wiggly red line in the 50 day moving average. The Aggressive Growth Portfolio owns a full position; though this is a result of a number of round trip trading sells and buys---the latest being a Buy at $160. BLK is currently on the Aggressive Growth Buy List; the lower boundary of its Sell Half Range is $314.

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.