Waddell & Reed (WDR)
One of the oldest mutual fund companies in the U.S., Waddell & Reed (WDR) is still growing quarterly revenues and earnings by double digits. With $114 billion in assets under management, analysts expect WDR to report Q4 earnings of 78 cents on Feb. 4 — 28% higher year-over-year.
According to Investor’s Business Daily, 55% of WDR’s growth over the past 10 years has been organic growth, rather than growth-by-acquisition. When it comes to asset managers, few do it better.
Why is this important? Because WDR has been able to save the money for dividends, which have increased 80% since 2010. Currently yielding 2.1%, WDR stock pays out the exact same amount as BlackRock’s in terms of yield.
Income investors should know that WDR yield has stayed above 2% in 8 out of the last 10 years, with 2007 and 2013 being the exceptions. Combined with consistent capital appreciation, WDR has outperformed BLK in four out of the past five years. With the good times expected to last at least one more year, I expect the same outcome in 2014.