Understanding BlackRock Yields and Continued Repurchases
Asset managers continue to reward investors with strong yields and repurchases in line with their operating performances. BlackRock (BLK) has attracted flows across its Retail, iShares, and Institutional divisions and offerings, reflecting rising markets and strong product offerings.
In 3Q17, BlackRock paid dividends of $2.50—9% higher than in 3Q16 but similar to the previous quarter’s payouts.
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The company’s dividend yield at current prices stands at 2.11%, which is higher than the industry average of 1.9%. Competitors have the following yields:
Together, these companies make up 2.4% of the SPDR S&P 500 ETF (SPX-INDEX) (SPY).
Repurchases at current prices
BlackRock repurchased $275 million of its own stock in 3Q17, which was in line with the previous five quarters, reflecting a stable reduction in outstanding shares. The company’s repurchases have been consistent, regardless of the spike in its stock prices, due to its strong operating performance. This trend is expected to continue in 4Q17, though any substantial decline in the stock price could trigger higher repurchases.
On a YoY (year-over-year) basis, BlackRock, through repurchases, reduced the weighted-average diluted number of shares to 163.8 million from 166.3 million. Over the past six months, BlackRock stock has risen 21.7% on strong inflows across offerings, continued ETF dominance, rising performance income, and operating margins.
BlackRock’s diversified offerings across regions and asset class, as well as its active and passive offerings, have attracted clients from all categories, helping it amass ~$6 trillion in assets under management. The company is now focusing on deploying more technology to help investors add money and generate returns.