What does Eaton Vance do?
Eaton Vance is an investment management company dating back to 1924. They serve high net worth individuals as well as institutions. Their products include Closed-End Funds, Equities Funds, and Fixed Income devices. Their offices are located in Boston, Atlanta, London, Singapore, Sydney, and more.
Eaton Vance is made up of five investment affiliates-Atlanta Capital, Eaton Vance, Parametric, Hexavest, and Calvert.
EV is a DIVIDEND ARISTOCRAT; it has increased its dividend for THIRTY-SEVEN years.
How does the Dividend Look?
Yield = 3.39%
1 yr growth = 12.9%
5 yr growth = 9.73%
Payout Ratio = 40.72%
Given its track record of paying a growing dividend and payout ratio, I believe the dividend is VERY safe. The yield is between 3-4%; this is a good place for companies that are a mix of dividend plus potential growth. Here is my youtube video on EV that I did:
P/E = 11.97
P/Book = 4.03
Profit Margin = 23.46%
Return on Equity = 29.27%
Price/Cash Flow = 11.28
Long Term Debt/Equity = 126%
Projected EPS Growth = 5.09%
The valuation of the stock is currently quite reasonable, the P/E has historically been much higher. This could represent an opportunity to buy at a discounted rate. Profit margin and Return on Equity are some of the strongest suites of this company. Projected growth is only 5%, while not great, it is at least projected to grow. I’m personally less concerned about this as an income investor.
Latest Earnings Report
Diluted Earnings per share are up 14%. Specifically, 0.89 vs. .78 quarter to quarter
Adjusted Earnings per share up 16%. 0.89 vs. 0.77
These are some great earnings growth numbers for Eaton Vance.
Net inflows of 4.6 billion dollars representing a 4% annual growth in managed assets
Management fees are down. This is because index funds and etfs are lowering their fees to be more competitive with places like Vanguard and Fidelity
Consolidated Assets under management up 7%
Overall, I think Eaton Vance is a good income stock with perhaps some potential to still grow and offer capital appreciation. The main risks include stock market declines, as this causes people to remove assets. However, given that EV has fixed income exposure as well, I believe they can navigate through that. A decrease in management fees represents a possible decline in revenue, a point of concern. Like most financial sector stocks, this is a volatile investment, currently carrying a beta of around 1.5.
As always, I am NOT a financial advisor or professional.