Eaton Vance Corporation

Eaton Vance Corp. is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance was formed by the 1979 merger of two Boston-based investment management firms: Eaton & Howard, Inc., founded in 1924, and Vance, Sanders & Company, organized in 1934. (Company History)

Eaton Vance and its affiliates offer individuals and institutions investment products and wealth management services and creation, marketing, and management of investment funds. It provides investment products to individuals, institutions and financial professionals in the US, including wealth management solutions, defined contribution investment only and sub-advisory services.

The Company

Eaton Vance Corp. (EV), through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. It also provides investment management and counseling services to institutions and individuals. Further, the company operates as an adviser and distributor of investment companies and separate accounts. As of October 31, 2004, the company provided investment advisory or administration services to approximately 150 funds; approximately 1,300 separately managed individual and institutional accounts; and participated in approximately 40 retail-managed account broker/dealer programs. It markets and distributes shares of funds through a retail network of national and regional broker/dealers, banks, insurance companies, and financial planning firms. Eaton Vance Corp. was founded in 1944 and is headquartered in Boston, Massachusetts. (Daily Chart) (Weekly Chart)

19 October
Price $35.61
1yr Target $39.17
Analysts 12
1yr Cap Gain 10.00%
Dividend $0.88
Yield 2.47%
1yr Est Tot Return 12.47%

Market Cap $4.23 Bil
Beta 1.65
EPS (ttm) $2.26
Payout Ratio 38.93%
EPS next yr $2.62
P/E 15.76
PEG 1.35
Forward P/E 13.61
Debt/Equity 1.13
ROA 15.70%
ROE 50.70%
ROI 14.00%
Sales $1.44 Bil
Income $276.00 Mil
Profit Margin 19.16%

Eaton Vance offers a wide variety of investment strategies and wealth management to the following four areas:

1. For Individual Investors. Mutual funds, closed-end funds and separately managed accounts that serve the retirement savings, lifetime income and other needs of individual investors. 
2. For Institutional Investors. Equity, income and alternative strategies for corporate, public and Taft-Hartley Act retirement plans, foundations and endowments, settlement trusts, and sovereign wealth funds.
3. For High-Net-Worth Families. Eaton Vance Investment Counsel (EVIC) offers customized financial guidance and wealth management solutions to high-net-worth individuals and their families, as well as to endowments and foundations.
4. For Financial Professionals. Investment solutions, market intelligence and practice management tools to help national, regional and independent broker-dealer firms, registered investment advisors, banks, insurance companies and private wealth managers, build their businesses.

The Fundamentals

Year
2015 Est
2014 Est
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003

Revenues
$1.51 Bil
$1.45 Bil
$1.30 Bil
$1.15 Bil
$1.20 Bil
$1.08 Bil
$0.85 Bil
$1.09 Bil
$1.08 Bil
$0.86 Bil
$0.75 Bil
$0.66 Bil
$0.52 Bil

Earnings
$2.61
$2.44
$1.53
$1.72
$1.75
$1.40
$1.07
$1.57
$1.06
$1.17
$1.13
$0.99
$0.75

Dividends
$1.04
$0.91
$0.82
$0.77
$0.73
$0.66
$0.62
$0.60
$0.51
$0.42
$0.34
$0.27
$0.20

Payout Ratio
39.84%
37.29%
53.59%
44.76%
41.71%
47.14%
57.94%
38.21%
48.11%
35.89%
30.08%
27.27%
26.66%

Revenue Growth Rate
1 year = 13.04%
2 year = 4.08%
3 year = 6.30%
4 year = 11.20%
5 year = 3.58%
10 year = 9.59%

Earnings Growth Rate
1 year = -11.05%
2 year = -6.50%
3 year = 2.97%
4 year = 9.35%
5 year = -0.52%
10 year = 7.38%

Dividend Growth Rate
1 year = 6.49%
2 year = 5.98%
3 year = 7.42%
4 year = 7.23%
5 year = 6.44%
10 year = 15.15%

The Technicals

The technical indicators on the charts below are very interesting. While it's easier to see on the daily chart, it's obvious on both the daily and weekly charts that the stock is over sold and starting to turn up. Knowing from the fundamentals above that the beta is 1.65, this stock is one for the swing traders. And looking at the charts below, the daily chart is the swing trading chart. For those individuals disinclined to swing trade like the long term dividend growth investors, the chart to use for buys would be the weekly chart. In both cases, the momentum indicators will identify the turning points for buys and sells.

Daily Chart

Weekly Chart

The Competition

Eaton Vance Corporation is part of the Asset Management Industry which is part of the Financial Sector of the economy. Below are a few of the major corporations included in this industry. They each pay at least a minimal dividend and they are listed in the order of their market capitalization.

1. BlackRock, Inc.  (BLK)
   
2. The Bank of New York Mellon Corp.  (BK)
   
3. The Blackstone Group LP  (BX)
   
4. Franklin Resources Inc.  (BEN)
   
5. State Street Corp.  (STT)
   
6. Ameriprise Financials, Inc.  (AMP)
   
7. T. Rowe Price Group, Inc.  (TROW)
   
8. Kohlberg Kravis Roberts and Co. LP.  (KKR)
   
9. Invesco LTD.  (IVZ)
   
10. Northern Trust Corp.  (NTRS)
    
11. The Carlyle Group LP  (CG)
    
12. Voya Financial, Inc  (VOYA)
    
13. Oaktree Capital Group, LLC  (OAK)
    
14. Lazard LTD.  (LAZ)
    
15. SEI Investments Co  (SEIC)
    
16. Legg Mason Inc.  (LM)
    
17. Eaton Vance Corp  (EV)
    
18. Waddell and Reed Financial, Inc.  (WDR)
    
19. Ares Management, Inc.  (ARES)
    
20. Prospect Capital Corp.  (PSEC)

Conclusion

I'm constantly interested in the financial aspects of investing so it's not too surprising that companies that operate in either the Asset Management or Diversified Investment space have always intrigued me. Eaton Vance is one of quite a few companies that operate in this space. 

I like how they've been able to increase their revenues fairly consistently over the years even though these have been difficult years for the financial sector. Going forward the economy may face additional challenges and it's nice to know that a company like Eaton Vance has the professionals to keep the revenues increasing in a relatively consistent manner. The earnings give me pause because they haven't been as consistent as the revenues but estimates going forward show improving earnings as well as revenues. 

For dividend growth investors like myself, the increasing dividend is reassuring. In fact just this week the company declared a $0.25/share quarterly dividend (this is just one more reason I review dividend increases each week). This increased dividend means that Eaton Vance has now increased its dividend annually for 33 years and remains once again on the list of Dividend Champions. This dividend is a 14.0% increase from the prior dividend of $0.22. The current yield going forward is 2.83% and is payable Nov. 12 for shareholders of record Oct. 31.

I intend to start a position in this security in the next few weeks as funds become available. I don't expect to own a large position in this stock but I do expect to own a large position in this sector of the market through the ownership of a number of companies in this space. I believe that exposure to this area of the stock market is important for any portfolio. Wise investors will spend time analyzing a number of these companies to find those companies that fit in with their investing philosophy. 

Good Luck and Good Trading.