This brainy company’s profitability and cash flows are growing despite COVID-19, its dividend yield is terrific, and yet its business is undervalued. Whichever way I look at APAM, I see green. The company has been successfully making investments in hiring the best talent, operations, and distribution teams, and compounding its clients’ assets. In Q3 2020, APAM’s third-generation investment strategies recorded an annual organic growth rate of 63%, and the company expects more to come. Investors too have latched on to this unique growth, income, and value play, and the stock has appreciated 62% year on year. Wall Street analysts also are bullish on the stock and have rated it 3.85/5. The payout 5-year growth rate may be a modest 3.68%, but it suggests that the company is likely to pay about $3 every year, which makes it attractive for income investors as well.ĪPAM’s Forward EV/EBITDA ratio is 8.82 compared to the sector median of 12.86, which suggests the business is undervalued. Its dividend payouts have grown steadily in the last 7 years. The company’s profitability is improving, its operating cash flows are increasing, and it keeps rewarding its shareholders by paying handsome dividends.ĪPAM’s operating cash flows in the first 9 months of 2020 increased 14% year over year, and I estimate that the trend will continue.ĪPAM is a consistent and generous dividend payer and is on track to pay $3.39 in 2020, which earns it the tag of a high dividend payer, with a dividend yield of 6.84% based on its price of about $49 as of December 9, 2020. In the first 9 months of 2020, the company generated $299 million in operating cash flows, of which it paid out $151 million, or about 50% of the cash flows, as dividend. It tells you that the company employs the right kind of talent, who then take its productivity sky-high.Ī quick comparison of the company’s quarter-over-quarter cash flow statements reveals that it generates healthy operating cash flows in every quarter, which are higher than its net income. Its TTM Return on Total Capital and TTM Return on Total Assets ratios are very solid at 41.94% and 17%, respectively.ĪPAM’s TTM Net Income per Employee is $418k, which is way above the sector median of $67k. So, the firm is doing better in COVID-19 times than what it was doing when there was no virus around. Its Operating Income to Sales Ratio increased to 41.6% from 37.4% and its Net Income to Sales ratio grew to 25.3% from 20% in the same period. In Q3 2020, APAM’s revenues jumped by 14.8% to about $233 million from $203 million in Q3 2019. Here are the prospects of this brainy company that is likely to run away on a strong bull ride: I am bullish on its long-term prospects because the post-COVID-19 world is likely to witness a major shift in investment patterns, and APAM seems set to satisfy its global clients’ needs with its top talent pool and open architecture system. APAM is a growth and dividend stock, an extremely unique proposition. Global investment firm Artisan Partners Asset Management ( NYSE: APAM) focuses on hiring the top talent and satisfying its clients’ needs by offering them a range of proprietary and external global investment options. A man who works with his hands is a laborer a man who works with his hands and his brain is a craftsman but a man who works with his hands and his brain and his heart is an artist.
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