Dan Veru
Dan Veru is executive vice president and co-chief investment officer at Palisade Capital Management, LLC, Fort Lee, New Jersey, which has $3 billion under management. PalisadeCapital.com
Today’s Stock of the Week is a well-known financial advisory firm, but it also is a major player in asset management. Keep reading to learn more.
Lazard Ltd. (LAZ) is best known for its financial advisory services that help companies, institutions and governments handle mergers and acquisitions, restructuring, debt and credit management and more. This is a high-margin business that should benefit as global economic growth speeds up.
Although the stock prices of advisory firms tend to be volatile, Lazard also has a significant asset-management business—with $187 billion in assets under management—which gives it more stability than pure advisory firms. Revenue of $2.4 billion in 2015 was made up of $1.3 billion from advisory services and $1.1 billion from asset management. The proportion should remain similar as revenue grows to about $2.45 billion in 2016 and $2.5 billion in 2017.
Management has further stabilized revenue streams by selling off the parts of the business focused on initial public offerings and similar activities. Volatility remains, of course, but the likely earnings drop in 2016 is a buying opportunity. The dividend of $1.52/share/yr., recently yielding 3.8%, appears secure.
Earnings per share: 2017 est./$3.22… 2016 est./$2.91… 2015/$3.60.
Dan Veru is executive vice president and co-chief investment officer at Palisade Capital Management, LLC, Fort Lee, New Jersey, which has $3 billion under management. PalisadeCapital.com