3. Morgan Stanley (NYSE:MS)
Fisher Asset Management’s Stake Value: $1,613,107,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.09%
Dividend Yield as of February 6: 3.12%
At the close of the fourth quarter of 2022, Ken Fisher’s hedge fund held a stake worth $1.61 billion in Morgan Stanley (NYSE:MS). The investment covers 1.09% of Fisher Asset Management’s 13F portfolio.
This January, Credit Suisse analyst Susan Roth Katzke updated his price target on Morgan Stanley (NYSE:MS) to $102 from $97 and maintained an Outperform rating on the shares.
On January 17, Morgan Stanley (NYSE:MS) declared a quarterly cash dividend of $0.775 per common share. The dividend is payable on February 15 to investors of record on January 31. As of February 6, the stock is offering a forward dividend yield of 3.12% and has returned 15% to investors over the past six months.
Here is what Madison Funds had to say about Morgan Stanley (NYSE:MS) in its Q3 2022 investor letter:
“This quarter we are highlighting Morgan Stanley (NYSE:MS) as a relative yield example in the Financial sector. MS is a leading investment bank and wealth management firm with approximately $5 trillion of client assets under management. It merged Citigroup’s Smith Barney business into its own wealth management business after the 2008 recession/financial crisis, which resulted in a more stable business model. Recent acquisitions of asset manager Eaton Vance and E-Trade provide additional stability and higher returns on capital. We believe MS has a sustainable competitive advantage due to its size and scale, global reach, strong reputation, and financial distribution capabilities. Importantly for a financial institution, it is in good financial health as key leverage ratios including common equity Tier 1 ratio, Tier 1 capital ratio, Tier 1 leverage ratio, and supplementary leverage ratio were all well above required minimums at the end of 2021.
Our thesis on MS is that its wealth management business will continue to become a larger part of the overall company, which will increase overall margins and return on equity (ROE). Wealth management and asset management are less cyclical than investment banking, and often generate higher margins and provide better stability of financial results. For example, the addition of Smith Barney added significant scale and boosted wealth management operating margins from below 10% into the mid-20%s over the past several years while also increasing returns on equity. Looking ahead, we believe the company will benefit from rising asset prices and higher interest rates, should they happen over time…read more
