BlackRock, Inc. (NYSE: BLK)

Sector: Financial Services Industry: Asset Management CIK: 0002012383
Market Cap 199.59 Bn
P/B 7.97
P/E 85.40
P/S 21.98
ROIC (Qtr) 8.19
Div Yield % 1.00
Rev 1y % (Qtr) 25.25
Total Debt (Qtr) 15.04 Bn
Debt/Equity (Qtr) 0.27
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About

Investment thesis

Bull case

  • Strong tangible asset base of 99.16B provides 6.59x coverage of total debt 15.04B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 4.27B provides exceptional 15.69x coverage of minority interest expenses 272M, showing strong core operations.
  • Strong operating cash flow of 4.27B provides 1.54x coverage of SG&A expenses 2.78B, showing efficient operational cost management.
  • Robust free cash flow of 3.93B exceeds capital expenditure of 335M by 11.74x, indicating strong organic growth funding capability.
  • Cash position of 9.98B provides exceptional 36.69x coverage of minority interest expenses 272M, indicating strong liquidity.

Bear case

  • Operating cash flow of 4.27B barely covers its investment activities of (7.28B), with a coverage ratio of -0.59, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 4.27B provides thin coverage of dividend payments of (791M) with a -5.40 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 9.98B provide limited coverage of acquisition spending of (6.36B), which is -1.57x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 4.27B shows concerning coverage of stock compensation expenses of 1.13B, with a 3.78 ratio indicating potential earnings quality issues.
  • Retained earnings of 37.58B provide limited buffer against comprehensive income items of (558M), which is -67.35x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Asset Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BLK BlackRock, Inc. 199.59 Bn 85.40 21.98 15.04 Bn
2 BN BROOKFIELD Corp /ON/ 103.94 Bn 31.52 5.64 262.97 Bn
3 AMP Ameriprise Financial Inc 88.69 Bn 55.02 7.20 5.89 Bn
4 BX Blackstone Inc. 88.51 Bn 49.39 10.93 12.89 Bn
5 KKR KKR & Co. Inc. 55.86 Bn 28.33 13.23 53.12 Bn
6 STT State Street Corp 46.52 Bn 21.77 3.91 34.72 Bn
7 NTRS Northern Trust Corp 34.14 Bn 33.31 6.71 15.64 Bn
8 RJF Raymond James Financial Inc 32.89 Bn 37.63 4.14 5.10 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.25 0.94
EV to Cash from Ops. EV/CFO 71.80 41.10
EV to Debt EV to Debt 13.49 15.28
EV to EBIT EV/EBIT 61.32 23.47
EV to EBITDA EV/EBITDA 55.91 47.80
EV to Free Cash Flow [EV/FCF] EV/FCF 78.68 38.62
EV to Market Cap EV to Market Cap 1.02 7.81
EV to Revenue EV/Rev 22.34 27.38
Price to Book Value [P/B] P/B 7.97 2.34
Price to Earnings [P/E] P/E 85.40 11.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 7.71 4.66
Dividend Payout Ratio % Div Payout % (Qtr) 52.70 -5.56
Dividend per Basic Share Div per Share (Qtr) 20.73 1.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 81.64 49.83
Interest Coverage Int. cover (Qtr) 15.88 25.16
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -15.92 -35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -28.91 15.43
Dividend Growth (1y) % Div 1y % (Qtr) 2.12 1.65
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.21 -90.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.77 35.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.70 -22.13
EBT Growth (1y) % EBT 1y % (Qtr) -0.13 -163.05
EPS Growth (1y) % EPS 1y % (Qtr) -3.84 -20.61
FCF Growth (1y) % FCF 1y % (Qtr) -2.82 220.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.06 -53.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.14 0.22
Cash Payout Ratio Cash Payout (Qtr) 0.17 0.36
Cash Ratio Cash Ratio 0.00 0.38
Current Ratio Current Ratio 0.00 0.86
Debt to Equity Ratio Debt/Equity (Qtr) 0.27 0.70
Interest Cover Ratio Int Coverage (Qtr) 15.88 25.16
Times Interest Earned Times Interest Earned (Qtr) 15.88 25.16
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 41.40 -114.76
EBIT Margin % EBIT Margin % (Qtr) 36.57 -127.24
EBT Margin % EBT Margin % (Qtr) 34.27 -150.97
Gross Margin % Gross Margin % (Qtr) 47.70 67.88
Net Profit Margin % Net Margin % (Qtr) 26.60 -148.68