Asset management is one of the fastest growing industries because people are turning increasingly to professional services to manage their finances. Asset management firms have gained popularity among the younger generations over the past couple of years. And because millennials are forecasted to hold five times the wealth they hold now by 2030, the demand for wealth management will almost certainly grow. In fact, 47% of the younger generations are expected to engage wealth management firms.
As individuals and corporations sort their finances as they recover from the pandemic-led recession, the global wealth management market is expected to increase 8.7% year-over-year to $1.26 trillion in 2021.
SEI Investments Company (SEIC)
SEIC is a leading technology-driven wealth and investment management company. It has been providing wealth management solutions and financial technologies for more than 50 years. SEIC is a two-time recipient of the Family Wealth Report Award for “Outsourcing/Business Process Outsourcing”. This showcases the company’s potential in leveraging its solutions globally and is a recognition of its promising technological solutions.
On May 28, SEIC’s wholly owned subsidiary, SEI Canada, announced that it intends to launch a new class of units for a Canadian fixed income fund, a markets equity fund and an international equity fund. With the launch, the company expects to bring additional options to SEI Canada’s offering and to emphasize a client-first approach.
SEIC’s revenues increased 10% year-over-year to $455.69 million in its fiscal first quarter, ended March 31. Its income from operations grew 21% from its year-ago value to $132.84 million, while its net income improved 19% year-over-year to $129.47 million. The company’s EPS increased 24% year-over-year to $0.89.
A $461.78 million consensus revenue estimate for its fiscal second quarter (ending June 2021) indicates a 15.2% increase year-over-year. The Street expects the company’s EPS to rise 33.8% from the prior year quarter to $0.91 in the current quarter. Shares of SEIC have gained 5.1% over the past year, and 8.7% year-to-date.
It is no surprise that SEIC has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock also has a B grade for Stability and Quality. Among the 63 stocks in the Asset Management industry, SEIC is ranked #9.
To see additional SEIC Ratings for Sentiment, Value, Growth and Momentum, click here.
Affiliated Managers Group, Inc. (AMG)
AMG offers asset management services mainly to mutual funds, institutional clients and high-net-worth individuals through its affiliates. The company also offers customized investment solutions and fiduciary services. Its total assets under management stood at $716.20 billion at the close of its f fiscal year 2020.
On March 22, AMG Funds LLC, a subsidiary of AMG, announced that AMG is in support of a series of enhancements to its U.S wealth platform. Under this repositioning, several of AMG’s best performing differentiated strategies will be available in the U.S. markets, thereby diversifying its product portfolio in this region.
On April 30, AMG acquired a minority equity interest in OCP Amia Limited. The partnership should enhance AMG’s participation in private markets in the Asia-Pacific region.
AMG’s revenue increased 10.2% year-over-year to $559.10 million in its fiscal first quarter, ended March 31. Its adjusted EBITDA increased 23% from its year-ago value to $246.8 million. Its net income stood at $214.1 million, up 435.3% from the same period last year. The company’s EPS increased 1,133.3% year-over-year to $3.41. Its cash and cash equivalents balance rose 122.7% from the prior year quarter to $4.43 billion over this period.
Analysts expect AMG’s revenues to increase 19.5% year-over-year to $562.75 million in the current quarter, ending June 2021. A $3.77 consensus EPS estimate for the current quarter represents a 37.6% improvement from the same period last year. Also, AMG surpassed the Street’s EPS estimates in each of the trailing four quarters. Shares of AMG have gained 108.2% over the past year, and 57.1% year-to-date.
AMG has an overall B rating, which equates to Buy in our proprietary rating system. AMG has a B grade for Growth and Quality. It is ranked #11 in the same industry.
Beyond what we’ve stated above, we have also rated AMG for Value, Sentiment, Momentum and Stability. Click here to view all AMG Ratings.
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SEIC shares were trading at $62.61 per share on Friday afternoon, up $0.14 (+0.22%). Year-to-date, SEIC has gained 8.94%, versus a 13.66% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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