{"id":76892,"date":"2023-10-26T00:52:47","date_gmt":"2023-10-26T04:52:47","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/blackrock-blackrock-this-dividend-stock-is-a-no-brainer-buy-nyseblk\/"},"modified":"2023-10-26T00:52:53","modified_gmt":"2023-10-26T04:52:53","slug":"blackrock-blackrock-this-dividend-stock-is-a-no-brainer-buy-nyseblk","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=76892","title":{"rendered":"BlackRock: BlackRock: This Dividend Stock Is A No-Brainer Buy (NYSE:BLK)"},"content":{"rendered":"
\n

<\/picture>
\n

A couple enjoying a relaxing sunset.<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

What’s the most surefire way to build generational wealth? From my vantage point, I would argue that buying companies that dominate massive and growing industries is a good place to start.<\/p>\n

That’s because when a piece of a pie is growing and a company is also growing its share of that pie, amazing things like net revenue and earnings growth happen. Take, for instance, BlackRock (<\/span>NYSE:BLK<\/span>): The company’s total assets under management as of September 30 stood at a whopping $9.1 trillion. That equates to roughly $2 trillion more than its next closest competitor, Vanguard, and its approximately $7 trillion in AUM.<\/span><\/p>\n

It also gets even better. The global asset management industry is expected to grow from $111.2 trillion in AUM in 2020 to $145.4 trillion in AUM in 2025. Since I covered BlackRock last month and rated it a buy, the stock has dipped 7%. Let’s revisit the company’s fundamentals and valuation to unpack why I am upgrading it to a strong buy.<\/span><\/p>\n

\n

\"BLK<\/span>
\n

DK Research Terminal<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

When 10-year U.S. Treasuries yield 4.9%, BlackRock’s 3.2% dividend yield isn’t going to get a lot of attention. As I’ll expand on further, that’s a shame. The company’s EPS payout ratio of 59% is more than the 50% that rating agencies like to see from the asset management industry. However, the company is in an earnings trough year. As it recovers in 2024 and beyond, the payout ratio should stabilize.<\/p>\n

BlackRock also has a remarkably robust balance sheet. The asset manager’s 0.16 debt-to-capital ratio is below the industry-safe guideline of 0.2. Along with its market-leading position in its industry, that is why S&P has assigned an AA- credit rating to BlackRock on a stable outlook. This puts the company at just a 0.55% risk of closing its doors by 2053. Put another way, in 181 out of 182 scenarios, BlackRock won’t be going bankrupt in the next 30 years. That makes it a smart pick for capital preservation.<\/p>\n

Not to mention that investors buying at the current valuation are building in a margin of safety that could give a valuation boost to the stock moving forward. This is because the shares of BlackRock are trading at a 22% discount to their fair value of $783 a share. That could translate into a 29% upside from the current share price of $607 (as of October 25, 2023).<\/p>\n