Raymond James' Scout Investments Buyout To Boost Earnings

In its efforts to expand inorganically, Raymond James Financial, Inc. (NYSE:RJF) completed the acquisition of Scout Investments and its Reams Asset Management division from UMB Financial Corp. (NASDAQ:UMBF) . The financial terms of the deal, announced in April, were not disclosed.

The acquired operations will now be part of Carillon Tower Advisers, the subsidiary of Raymond James. Going forward, Carillon Tower will be able to distribute investment products of Scout and Reams across the globe.

Notably, Scout is an equity asset manager and Reams is focused on institutional-based fixed income business. Following the closure of the deal, Raymond James’ total assets under management are projected to be roughly $123 billion.

Further, Paul Reilly, chairman and CEO of Raymond James, expects the deal to be marginally accretive to the earnings. He gave this view on the latest earnings conference call.

Earlier at the time of announcing the deal, Reilly had said, “Building on our strong foundation of asset management expertise is a key component of the firm’s growth strategy and its focus on providing retail and institutional clients with sophisticated investment options.”

Raymond James has been strategically expanding and geographically diversifying its operations through acquisitions over the years now. In 2016, the company acquired German-based Mummert & Company Corporate Finance GmbH in a bid to expand its investment banking activities in Europe. It also closed the buyout of MacDougall, MacDougall & MacTier Inc. (also known as 3Macs), an independent Canadian investment firm.

These initiatives seem a great boost to investors and analysts to cheer for. Shares of Raymond James have rallied 15.6% over the past year, outperforming the industry’s 13.5% gain.



Further, analysts look happy with the company’s expansion efforts. The Zacks Consensus Estimate for the current fiscal year earnings has been revised 1.4% upward to $5.89 per share over the last 30 days.

Zacks Rank & Other Stocks Worth a Look

Raymond James carries a Zacks Rank #2 (Buy). Two other stocks worth considering from the same industry are Interactive Brokers Group, Inc. (NASDAQ:IBKR) and Stifel Financial Corporation (NYSE:SF) , both carrying the same bullish Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Interactive Brokers’ earnings estimates for 2017 have been revised 3.2% upward over the past 30 days. Share price of the company has soared more than 58.1% over the last six months.

Stifel Financial’s earnings estimates for the current year have been revised 1.5% upward in the past 30 days. Also, its share price has increased 18.2% over the last six months.

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UMB Financial Corporation (UMBF): Free Stock Analysis Report

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