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Comparing Blackstone’s Valuations to Its Peers’

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Higher price-to-book ratio

The Blackstone Group’s (BX) price-to-book value (or PBV) ratio on a next-12-month basis stands at 3.35x compared to its peer average of 3.06x, implying BX’s premium valuation.

Blackstone’s peers CBRE Group (CBG), Greenhill & Co. (GHL), and Brookfield Asset Management (BAM) have posted PBV ratios of 3.82x, 3.63x, and 1.74x, respectively, on a next-12-month basis.

Wall Street analysts have given an average estimate of Blackstone’s revenue of $1.7 billion for 4Q17, while they’ve given its revenue high and low estimates of $1.9 billion and $1.5 billion, respectively. The average estimate represents a fall from the revenue the company posted in 3Q17. Such a fall could negatively impact its valuations.

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Favorable outlook

According to Blackstone’s management, the company has been finding opportunities for investment amid rising prices, and its target geographies have a favorable outlook, which has benefitted the company. One concern affecting the company’s valuation is regarding its payouts.

In 2017, Blackstone is expected to declare total dividends of $2.61 per share, while in 2018, it’s expected to declare dividends of $2.34 per share—a fall that could negatively impact its valuation. Moreover, the company decreased its quarterly payout to $0.44 per share in October 2017 from $0.54 per share in July 2017.

On a trailing-12-month basis, while Blackstone has a PBV ratio of 3.18x, its peers (XLF) Brookfield Asset Management (BAM), Greenhill & Co. (GHL), and CBRE Group (CBG) have PBV ratios of 1.55x, 2.01x, and 3.95x, respectively.

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