Dividend Stocks to Buy: Blackstone (BX)
Investing Type: Aggressive
Dividend Yield: 8.1%
The Blackstone Group L.P. (NYSE:BX) hasn’t had the smoothest ride over the past few years. BX rallied from $25 in 2014 to $38 in 2015, then fell back to the $25 mark in 2016 … before recovering to about $29 currently.
At least there’s some sort of comfort in the form of a big (but variant) 8%-plus dividend.
A dividend that high can often be a warning sign, but Blackstone is an exception. With superior management and a business that has plenty of secular growth, BX can maintain its lofty payout. If investors are lucky, they will also experience capital gains as well.
Blackstone CEO Stephen Schwarzman recently made the case that his stock should be worth more. Specifically if valued in-line with the S&P 500’s price-to-earnings ratio, Blackstone is worth $50. If that was based on the index’s dividend yield, BX stock would be worth $100, he reasons.
While that broad assessment doesn’t hold much water, the point is nonetheless the same: Blackstone shares probably are worth more than where they trade now.
Last quarter, Blackstone beat on the top and bottom lines, and analysts expect 45% earnings growth this year on top of 30% revenue expansion. All this for less than 10 times next year’s earnings estimates.
BX simply remains an “aggressive” play due to the relatively high volatility in the stock over the past few years, especially in the face of a rising market.