4. Morgan Stanley (NYSE:MS)
Fisher Asset Management’s Stake Value: $1,455,083,000
Dividend Yield as of November 16: 3.45%
Morgan Stanley (NYSE:MS) is an American multinational investment management and financial services company. The company’s meaningful excess capital and limited credit exposure make it well-positioned in the current market environment, according to BMO Capital analyst James Fotheringham. The analyst maintained an Outperform rating on the stock in October with a $95 price target.
Fisher Asset Management has been investing in Morgan Stanley (NYSE:MS) since the first quarter of 2012, opening its position with shares worth over $244.2 million. During Q3 2022, the hedge fund increased its position in the company by 69% and now owns MS stakes worth over $1.45 billion. The company represented 1.09% of billionaire Ken Fisher’s portfolio.
On October 27, Morgan Stanley (NYSE:MS) declared a quarterly dividend of $0.775 per share, consistent with its previous dividend. The company is one of the top dividend stocks on our list as it maintains a 9-year streak of dividend growth. The stock’s dividend yield came in at 3.45% on November 16.
As per Insider Monkey’s database for Q2 2022, 58 hedge funds owned investments in Morgan Stanley (NYSE:MS), with a total value of nearly $3 billion.
Madison Funds mentioned Morgan Stanley (NYSE:MS) in its Q3 2022 investor letter. Here is what the firm has to say:
“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…” (Click here to see the full text)
