Here's Why You Should Add Blackstone (BX) Stock Right Now

The Blackstone Group L.P. (NYSE:BX) offers a profitable investment opportunity driven by steady earnings growth and strong liquidity position.

Analysts also seem to be optimistic about its growth prospects as evident from the upward estimate revisions. Over the last 60 days, the Zacks Consensus Estimate for the current year was revised nearly 1% upward.

Further, this Zacks Rank #2 (Buy) stock has rallied 12.5% in the last three months, outpacing the Zacks categorized Investment Management industry’s gain of 6.7%.



Blackstone has a number of other aspects that make it an attractive investment option.

Earnings Per Share (EPS) Growth: In the last three to five years, Blackstone witnessed EPS growth of 41.6%, driven by strong global presence that allows broad diversification and organic growth. The company’s earnings are projected to grow 38.6% and 11.2% in 2017 and 2018, respectively.

Further, its long-term (three to five years) expected EPS growth of 19.5% promises reward for shareholders.

Revenue Strength: Blackstone’s revenues witnessed a five-year CAGR of 6.6% (2012–2016). Growth is anticipated to continue on the back of better performance of its funds. Top line is expected to grow nearly 25.8% in 2017, considerably higher than the industry average of 3.5%. This indicates its superiority in generating revenues.

Steady AUM Growth: Blackstone’s fee-earning assets under management (AUM) and total AUM have consistently demonstrated strong growth, aided by increasing net inflows. Over the last five years (2012–2016), fee-earning AUM has seen a CAGR of 13.3% and total AUM has recorded a CAGR of 14.9%. The growth trajectory should continue to be driven by the company’s diversified products, revenue mix and superior position in the alternative investments space.

Stock Seems Undervalued: With respect to Price-to-Book (P/B) and PEG ratios, Blackstone looks relatively undervalued. The company’s P/B ratio of 1.70 is below the industry average of 1.74. Also, the PEG ratio for the company is 0.62 compared with industry average of 1.46.

Other Stocks to Consider

Some other stocks in the same industry worth considering include Eaton Vance Corp. (NYSE:EV) , KKR & Co. L.P. (NYSE:KKR) and Franklin Resources, Inc. (NYSE:BEN) . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Eaton Vance was revised 3.3% upward for the current year, in the last 60 days. The company’s share price has increased 14.3% so far this year.

KKR & Co witnessed an upward earnings estimate revision of 5% for the current year, in the last 60 days. Its share price has increased 20.4% year to date.

Franklin Resources witnessed an upward earnings estimate revision of 4% for the current fiscal year, in the last 60 days. So far this year, its share price has increased 12.9%.

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The Blackstone Group L.P. (BX): Free Stock Analysis Report

Franklin Resources, Inc. (BEN): Free Stock Analysis Report

KKR & Co. L.P. (KKR): Free Stock Analysis Report

Eaton Vance Corporation (EV): Free Stock Analysis Report

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Zacks Investment Research