BlackRockThings are looking up for BlackRock (BLK), not just because the firm's shares have rallied more than 11.4% year-to-date. BlackRock weighs in as the largest asset manager in the world, thanks to more than $3.5 trillion in assets under management. Because that AUM level directly drives the firm's earnings, a bullish turn for stocks translates directly into higher management fees on BLK's top line.
BlackRock has undergone some transformations since the height of the recession. In 2009, it acquired Barclays Global Investors for approximately $13.5 billion, doubling the combined firm's AUM and skewing its asset focus from what had traditionally been a fixed-income shop to a more equity-focused operation. That asset mix meant that investors stuck with BLK when treasuries were rallying, and they're sticking with them still in this stock rally.
Better still, because institutional investors make up the majority of BLK's clients, the firm isn't as subject to retail investors' cash concerns; that means that AUM is more likely to ride out rough spots.All of those factors have translated into BlackRock's dividend. Last Thursday, the firm announced a 9.09% increase in its quarterly payout, ratcheting it to $1.50 per share. That's a 3.02% yield at current price levels. Investors looking for a solid core holding in the financial sector could do much worse than BlackRock. BlackRock, one of Blue Ridge Capital's holdings, shows up on recent lists of Financial Stocks Bought and Sold by Hedge Funds and 6 Stocks With Double-Digit Gains and Big Dividends. Follow @stockpickr
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