Investment bank and financial services company Morgan Stanley (MS) is in the spotlight as rebounding profitability highlights the dividend stock.
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Ranked as the sixth largest financial institution in the U.S., Morgan Stanley commands a significant presence in American banking. Nevertheless, the stock is a new addition to the top tier of dividend names.
Morgan Stanley's 3.6% annualized yield is reasonable, though its eye-catching dividend growth is what stands out. Morgan Stanley boasts a compound annual dividend growth rate (CAGR) of 23.6% and 32.4% over five and 10 years, respectively.
Although the next quarterly dividend is yet to be declared, investors can anticipate an ex-date in late April while the next dividend increase will likely come in June.
Last year was a tough one for Morgan Stanley as merger and acquisition revenue dried up and investment banking revenue fell. This weakness — in addition to the company being hit with a $249 million settlement for unauthorized block trading and a $286 million special FDIC assessment charge — resulted in earnings per share falling from $6.36 in 2022 to $5.18 in 2023.
However, 2024 is expected to bring renewed strength to the bank. Or new CEO Ted Pick — who took over the job from James Gormon in January — would certainly like to think so. Analysts expect earnings for 2024 to rebound to $6.37 per share before hitting $7.37 in 2025.
Morgan Stanley To Report Q1 Earnings
A first look at the progress of this growth plan will come when Morgan Stanley reports its first-quarter earnings on April 16. Analysts' consensus EPS estimate is $1.69 on revenue of $14.4 billion, according to FactSet.
Overall, Morgan Stanley is resoundingly stable. During last quarter's conference call, Pick cited geopolitical concerns and a weakening U.S. economy as Morgan Stanley's two biggest risks.
With conflicts currently somewhat contained and the economy surprisingly robust, investors can take some solace into the results.
Shares of Morgan Stanley are forming a cup base within a longer consolidation while trading above both 50-day and 200-day moving averages. Using MarketSurge charts, a buy point of 94.15 can be identified. Shares are trading near that entry.
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