Understanding BlackRock Inc's Dividend Prospects and Sustainability
BlackRock Inc (BLK, Financial) recently announced a dividend of $5.1 per share, payable on 2024-03-22, with the ex-dividend date set for 2024-03-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into BlackRock Inc's dividend performance and assess its sustainability.
What Does BlackRock Inc Do?
BlackRock is the largest asset manager in the world, with $10.008 trillion in assets under management at the end of December 2023. Its product mix is fairly diverse, with 52% of managed assets in equity strategies, 28% in fixed income, 9% in multi-asset classes, 8% in money market funds, and 3% in alternatives. Passive strategies account for around two thirds of long-term AUM, with the company's ETF platform maintaining a leading market share domestically and on a global basis. Product distribution is weighted more toward institutional clients, which by our calculations account for around 80% of AUM. BlackRock is geographically diverse, with clients in more than 100 countries and more than one third of managed assets coming from investors domiciled outside the US and Canada.
A Glimpse at BlackRock Inc's Dividend History
BlackRock Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis.
BlackRock Inc has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 21 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BlackRock Inc's Dividend Yield and Growth
As of today, BlackRock Inc currently has a 12-month trailing dividend yield of 2.39% and a 12-month forward dividend yield of 2.45%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, BlackRock Inc's annual dividend growth rate was 11.30%. Extended to a five-year horizon, this rate increased to 11.60% per year. And over the past decade, BlackRock Inc's annual dividends per share growth rate stands at an impressive 11.80%.
Based on BlackRock Inc's dividend yield and five-year growth rate, the 5-year yield on cost of BlackRock Inc stock as of today is approximately 4.14%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, BlackRock Inc's dividend payout ratio is 0.53.
BlackRock Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BlackRock Inc's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. BlackRock Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and BlackRock Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. BlackRock Inc's revenue has increased by approximately 4.20% per year on average, a rate that underperforms approximately 53.62% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, BlackRock Inc's earnings increased by approximately 3.00% per year on average, a rate that underperforms approximately 57.06% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.40%, which underperforms approximately 46.57% of global competitors.
Next Steps
Considering BlackRock Inc's consistent dividend growth, reasonable payout ratio, and strong profitability rank, the company's dividends appear sustainable. However, investors should be mindful of the growth metrics that underperform a significant portion of global competitors, which could impact the company's future dividend growth. For value investors, BlackRock Inc presents a compelling case as a dividend achiever with a potential for continued income. It remains essential for investors to monitor the company's performance and growth prospects to ensure the dividends are well-supported by the underlying financial health and market position.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
