Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

KKR & Co. L.P. (KKR), The Blackstone Group L.P. (BX): Two Strong Dividend-Paying Companies With Upward Potential

Page 1 of 2

Depending on their financial goals, investors’ asset allocation tactics vary widely. But companies offering high dividend payments while positioned for additional growth could fit nearly any portfolio. Private equity firms KKR & Co. L.P. (NYSE:KKRand The Blackstone Group L.P. (NYSE:BX) both fit the bill and deserve a look because of their investment success.


Operational excellence
KKR is a leading global private equity firm that focuses on energy & infrastructure, real estate, growth equity investments, and other sectors. In part because of its diversified portfolio, KKR & Co. L.P. (NYSE:KKR) boasts remarkable returns on its investments. For example, KKR’s first holding, Jazz Pharmaceuticals, has generated around 4.7 times cash to date on the original investment.The company has a three-year mean profit growth of 279%; Fortune lists Jazz as the fastest-growing company in 2013, and it is just one example of KKR & Co. L.P. (NYSE:KKR)’s holdings.

Metric KKR Blackstone
ROA 13.56% 4.66%
ROE 14.67% 11.28%

Blackstone, a global investment and advisory firm, also invests wisely. Since announcing that it’s trying to cut back its finance division to reduce holdings and streamline operations, General Electric (NYSE:GE) has been looking for partnership or selling opportunities. Blackstone realized the potential there and capitalized on it. While official company reports are not yet released, Blackstone will likely purchase 80 rental properties worth $2.7 billion from the conglomerate. As a result, GE will be able to continue downsizing its balance sheet while using the cash to further fuel its strategic shift.

The apparent deal comes at a time when apartment-related real-estate investment trusts are falling in price. This is good news for buyer Blackstone, which is increasingly becoming involved in the rental market. It has invested over 30,000 rentals since the credit crisis started in 2008. Moving forward, Blackstone plans to add to its growing $5 billion rental portfolio so it can hold real assets while generating cash through the rental income.

Not only do KKR & Co. L.P. (NYSE:KKR) and Blackstone operate effectively, but they both utilize cash well.

Cash is not king, just a servant
Over time, and especially given inflation rates, cash is a deplorable investment. Consider Warren Buffett’s philosophy on cash:

The one thing I will tell you is the worst investment you can have is cash. […] Cash is going to become worthless over time. But good businesses are going to become worth more over time .[..] the thing to do is find a good business and stick with it. We always keep enough cash around so I feel very comfortable and don’t worry about sleeping at night. But it’s not because I like cash as an investment. Cash is a bad investment over time.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!