Goldman Sachs Bank Stocks: Top 5 Stock Picks

3. Morgan Stanley (NYSE:MS)

Goldman Sachs’ Stake Value: $841,230,763

Number of Hedge Fund Holders: 51

Morgan Stanley (NYSE:MS) is one of the top Goldman Sachs bank stocks. In the first quarter of 2023, Goldman Sachs owned 9.58 million shares of Morgan Stanley (NYSE:MS) worth $841.2 million, representing 0.17% of the total portfolio. 

On July 18, Morgan Stanley (NYSE:MS) declared a $0.85 per share quarterly dividend, a 9.7% increase from its prior dividend of $0.78. The dividend is payable on August 15, to shareholders of record on July 31. 

According to Insider Monkey’s first quarter database, Morgan Stanley (NYSE:MS) was part of 51 hedge fund portfolios, compared to 55 in the prior quarter. Boykin Curry’s Eagle Capital Management is a prominent stakeholder of the company, with 5.4 million shares worth $477.5 million. 

Here is what Madison Dividend Income Fund has 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…” (Click here to see the full text)