The asset management industry is evolving and growing significantly owing to the increasing demand for asset management in developing countries, technological innovations, and consciousness among consumers seeking investment alternatives for diversification.
Given the industry’s bright prospects, fundamentally sound asset management stocks Federated Hermes, Inc. (FHI), Janus Henderson Group plc (JHG), and SEI Investments Company (SEIC) could be worth your attention amid favorable price targets.
With a rapidly evolving asset & wealth management industry, technological integration, changing demographics, and evolving investor preference, the global assets under management in the wealth management market is growing rapidly. The global assets under management is forecasted to reach $128.90 trillion in 2024 and grow to $158.70 trillion by 2028.
The global asset management market is expanding with the high demand for optimal asset utilization, a requirement for efficient tracking and management of assets, and a desire to minimize maintenance downtime. The global asset management market is expected to reach $10.48 trillion by 2033, expanding at a CAGR of 35.4%.
Further, digital technologies have contributed vastly to the strong growth of the industry with evolving government compliance requirements and the need for collaborative digital workflow, especially in marketing activities. This has resulted in the increased adoption of advanced digital asset management solutions.
Also, the increasing adoption of cloud-based DAM solutions, the rise in e-commerce and digital marketing, and the expansion of AI and machine learning propel the prospects of the digital asset management market.
Considering the encouraging market trends, let’s delve into the fundamentals of the top three Asset Management stocks, beginning with the third choice.
Stock #3: Federated Hermes, Inc. (FHI)
FHI is a publicly owned investment manager which provides its services to individuals, banking or thrift institutions, investment companies, and other various organizations. It manages separate client-focused equity, fixed income, balanced and money market mutual funds and separate client-focused equity, fixed income, money market, and balanced portfolios.
On July 31, FHI launched four actively managed ETFs that take a quantitative approach to stock selection. The newly launched products offer investors another way to access the disciplined Federated Hermes MDT investment process, crafted and refined for more than 30 years and now available in an ETF structure.
On July 25, FHI’s Board of Directors declared a dividend of $0.31 per share. The dividend is payable on Aug 15, 2024 to shareholders of record as of Aug 8, 2024.
FHI pays an annual dividend of $1.16, which translates to a yield of 2.60% at the current share price. Its four-year average dividend yield is 1.97%. Moreover, the company’s dividend payouts have increased at a CAGR of 17.4% over the past three years. Kroger has raised its dividends for 16 consecutive years.
For the second quarter that ended June 30, 2024, FHI reported total revenue of $402.58 million, of which its Administrative service fees, net—affiliates revenue increased 11.9% from the year-ago value to $95.35 million. The company’s net income and EPS came in at $21.03 million and $0.20 for the quarter, respectively.
Analysts expect FHI’s revenue and EPS for the third quarter (ending September 2024) to increase 1.3% and 7.1% year-over-year to $407.80 million and $0.92, respectively. Further, the company has surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.
Over the past year, FHI’s stock has gained 1% to close the last trading session at $32.49. Wall Street analysts expect the stock to reach $37 in the upcoming 12 months, indicating a potential upside of 13.9%.
FHI’s bright outlook is reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Quality. Within the Asset Management industry, FHI is ranked #13 out of 51 stocks.
Click here to access additional ratings of FHI (Growth, Value, Sentiment, Stability, and Momentum).
Stock #2: Janus Henderson Group plc (JHG)
JHG is an asset management holding entity. The firm offers services to institutional, retail clients, and high net worth clients. It manages separate client-focused equity and fixed income portfolios.
On July 31, JHG’s Board declared a second quarter dividend in respect of the three months ended June 30, 2024, of $0.39 per share. Shareholders on the register on the record date of August 12, 2024, will be paid the dividend on August 28, 2024.
JHG pays an annual dividend of $1.56, which translates to a yield of 4.61% at the current share price. Its four-year average dividend yield is 5.17%. Moreover, the company’s dividend payouts have increased at a CAGR of 2.2% over the past three years.
On July 1, JHG announced that it received all necessary regulatory approvals and completed the acquisition of Tabula Investment Management. The strategic acquisition enabled JHG to respond to client demand globally for its investment strategies and positioned it as a trusted player in the European ETF market.
During the second quarter that ended on June 30, 2024, JHG’s total revenue increased 13.9% year-over-year to $588.40 million. Its adjusted operating income grew 35.5% from the year-ago value to $164.70 million. Adjusted net income attributable to JHG and EPS of $135.20 million and $0.85, indicates increases of 32.5% and 37.1% from the prior year’s quarter, respectively.
Moreover, the company’s cash and cash equivalents and total assets stood at $1.01 billion and $6.41 billion as of June 30, 2024.
Analysts expect JHG’s revenue for the third quarter (ending September 2024) to increase 13.2% year-over-year to $589.77 million, and its EPS is expected to grow 19.1% year-over-year to $0.76 for the same quarter. Furthermore, the company has topped the consensus EPS estimates in all of the trailing four quarters.
The stock has surged 13.3% over the past six months and 22.8% over the past year to close the last trading session at $33.84. Moreover, its 12-month price target of $37.80 reflects an 11.7% potential upside.
JHG’s POWR Ratings reflect its bright prospects. The stock has an overall grade of B, translating to a Buy in our proprietary rating system.
JHG has a B grade for Growth. It is ranked #8 among 51 stocks within the Asset Management industry.
To see the other ratings of JHG for Sentiment, Quality, Value, Stability, and Momentum, click here.
Stock #1: SEI Investments Company (SEIC)
SEIC is a publicly owned asset management holding company which provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients.
On July 30, SEIC and Canoe Intelligence expanded their relationship through an enhanced integration that automates the transmission of private equity and hedge fund valuations, and private equity call and distribution data, enhancing operational efficiency for family offices using the SEI Archway PlatformSM.
On April 2, SEIC introduced a range of enhancements to its Separately Managed Account (SMA) and Unified Managed Account (UMA) solutions offered through the Managed Account Solutions program, which consist launch of additional internally-managed and third-party investment options, reduced costs, and technology updates that bolster tax optimization.
The enhancements have been designed to help advisors better serve mass-affluent, high-net-worth, and ultra-high-net-worth investors.
For the second quarter that ended June 30, 2024, SEIC’s total revenue rose 6.1% year-over-year to $518.99 million. Its income from operations grew 21.2% from the year-ago value to $136.51 million. The company’s net income and EPS came in at $139.12 million and $1.05, reflecting increases of 17% and 18% from the prior year’s quarter, respectively.
Street expects SEIC’s EPS for the third quarter (ending September 2024) to increase 20.7% year-over-year to $1.05. The company’s revenue is expected to grow 11.1% year-over-year to $529.78 million for the current quarter. Moreover, the company surpassed the consensus EPS estimates in all four trailing quarters.
Shares of SEIC have gained marginally over the past year to close the last trading session at $63.10. Wall Street analysts expect the stock to reach $73.75 in the upcoming 12 months, indicating a potential upside of 16.9%.
SEIC’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
SEIC has a B grade for Quality and Stability. It is ranked #5 among 51 stocks in the same industry.
In addition to the POWR Ratings we’ve stated above, we also have SEIC’s ratings for Value, Momentum, Sentiment, and Growth. Get all SEIC ratings here.
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SEIC shares . Year-to-date, SEIC has gained 1.28%, versus a 10.55% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 Asset Management Stocks Analysts Expect to Surge in 2024 StockNews.com
