In this article, we will be taking a look at the 5 best value dividend stocks to buy now. To read our detailed analysis of dividend investing, you can go directly to see the 10 Best Value Dividend Stocks to Buy Now.
5. Lazard Ltd (NYSE: LAZ)
Number of Hedge Fund Holders: 18
Dividend Yield: 3.98%
Lazard Ltd (NYSE: LAZ), a financial advisory and asset management firm, operates in North America, Europe, Asia, Australia, and Central and South America. The company ranks 5th on our list of the best value dividend stocks to buy now.
This April, Morgan Stanley’s Manan Gosalia upgraded shares of Lazard Ltd (NYSE: LAZ) from Equal Weight to Overweight. The analyst also raised his price target on the stock from $52 to $61.
In the second quarter of 2021, Lazard Ltd (NYSE: LAZ) had an EPS of $1.28, beating estimates by $0.40. The company’s revenue was $821.45 million, up 51.30% year over year and beating estimates by $163.27 million. Lazard Ltd (NYSE: LAZ) has gained 20.08% in the past 6 months and 14.83% year to date.
By the end of the second quarter of 2021, 18 hedge funds out of the 873 tracked by Insider Monkey held stakes in Lazard Ltd (NYSE: LAZ) worth roughly $785 million. This is compared to 19 hedge funds in the previous quarter with a total stake value of approximately $770 million.
Third Avenue Management, an investment management firm, mentioned Lazard Ltd (NYSE: LAZ) in its fourth-quarter 2020 investor letter. Here’s what they said:
“Lazard Ltd. (“Lazard”) – During the quarter, the Fund initiated a position in Lazard, which houses two distinct businesses – financial advisory and asset management. Lazard is one of the formidable competitors in the global financial advisory industry, though Lazard is not involved in investment banking lines of business which are balance sheet-intensive or those which take on credit risk. Lazard’s advisory business is the world’s fifth largest by revenues, putting the company’s advisory business on par with those of far larger companies, such as Bank of America and Citi. Meanwhile, Lazard’s advisory revenues are meaningfully larger than the likes of Credit Suisse and UBS. While advisory revenues represent a low single-digit percentage of revenues for those peers, the figure is slightly more than 50% for Lazard. One further point of attraction for Lazard’s advisory business is its sterling reputation in restructuring advisory, which often shines in challenging environments in which insolvencies and near-insolvencies rise. The remaining portion of Lazard’s revenue is derived from the company’s asset management business, which operates completely independent of the advisory business and at last report had approximately $248 billion of assets under management. Lazard’s assets under management are focused on several niches in active management commanding management fees at the higher end of the industry, and the performance of its strategies has been sufficiently strong to have generated inflows of late, an unusual accomplishment for an active manager. The company in total is very well-capitalized and has a long history of controlling the relationship between compensation, its primary expense, and revenue. We believe that our purchase price implies a modest multiple of current operating earnings and that the operating environment can certainly improve, most likely as M&A activity continues to accelerate, but from other sources as well. External to the company however, it is clear that there are a number of companies that would almost certainly be very eager to purchase one or both of Lazard’s businesses. Consolidation is rampant in the asset management industry and several purchases of asset management companies of similar size to Lazard, though arguably of lower quality, have been announced recently. Separately, several European investment banks, including ones named earlier in this paragraph, have publicly declared a desire to grow their advisory businesses, especially in cross-border M&A capabilities, which is a core competency within Lazard. Using conservative estimates of prices we believe could be realized in the sale of Lazard’s businesses, the current share price appears to meaningfully undervalue the company.”
