Having some exposure to private equity and alternative assets is a good way to diversify a traditional portfolio. Today's selection for IBD 50 Stocks to Watch, Blackstone is displaying impressive growth as it hits a buy point.
The stock is breaking out of a double-bottom base and trading near the 131.15 buy point. Volume was below average and the stock still needs to make a better move above the entry.
Blackstone is an alternative asset investment company based in New York. The company has a broad portfolio of assets, ranging from real estate and private equity to investments in hedge funds, credit and insurance products. In terms of revenue its largest sources are real estate, which accounts for 40% of revenue, and private equity, which accounts for 20%.
This past year has been a remarkable one for Blackstone in terms of growth. After earnings per share declined from $3.03 in 2019 to $1.50 in 2020, last year represented a record year. Earnings shot up to $8.13 per share.
The year was remarkable on many fronts, with assets under management rising 42% to $881 billion. Blackstone's efforts to gain investments from wealthy individuals and expand insurance clients paid off, especially for CEO Steve Schwarzman. He took home a record $1.1 billion in pay, bonuses and dividends.
Strong results also led to Blackstone increasing its dividend to $1.45 a share, currently yielding investors an impressive 4.4% on an annualized basis.
Growth Stock In Favorable Trend
The landscape for Blackstone remains buoyant as traditional funds rush into alternative assets to stay competitive. Alternative assets are projected to continue to see inflows, with the industry expecting assets under management to top $22 trillion in 2025, up from $15 trillion last year.
Analysts expect EPS to stabilize at $5.35 in 2022 (a 34% drop from 2021) and $6.13 in 2023. The company reports first-quarter earnings in late April. The consensus EPS estimate is $1.19 with revenue of $2.78 billion.
For a large company like Blackstone, news on acquisitions and dispositions is the norm. The most recent was last week, with a reported $23 billion bid from real estate investment trust Prologis to acquire Blackstone's Europe-based Milway logistics warehouse company. Discussions are ongoing, and it is currently unclear whether a deal will be reached.
With Blackstone firing on all cylinders, shares rose from a pandemic low of 36 to almost 150 per share in late November. As concerns about global growth took hold, shares pulled back but are now showing renewed strength.
