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BlackRock is the largest asset manager in existence. It has 9.5 trillion dollars in assets under
management. Compare that to Vanguard who is in second place with 8 trillion dollars in assets.
One can easily see that BlackRock is a very dominant player. With the market in a downturn this
year, BlackRock stock has taken a fall. Their stock is down 34.77% this year as their holdings
have taken a dive. I’m already a shareholder of BlackRock, but this market is making the idea of
purchasing more BlackRock shares very appealing.
The main reason I want to buy BlackRock shares is their valuation. BlackRock is currently trading
at a market cap of 90.05 billion dollars. This gives the company a p/e ratio of 16.45. While that’s
definitely not a very high p/e ratio, it’s worth noting here that I believe their p/e ratio is a little
misleading. The reason I say this is because their earnings are currently being affected by the
market downturn. Their assets are being valued less than before, so they are making less money
overall for managing that money. Because I believe that this downturn is temporary, I believe
that they are actually undervalued. When the overall market goes up, that benefits BlackRock.
Since I am bullish on the actual market itself, I don’t see any way to not be also bullish on
BlackRock. I believe that buying this stock at its current valuation is a really good deal long term.
Another reason that I am bullish on BlackRock is their continuance of getting more money to
manage. The markets have been terrible lately, yet BlackRock received $247.6 billion in net
inflows this year. That’s very impressive in my opinion. I think BlackRock will continue to build
its number of assets under management.
They also offer a really nice dividend of 3.27%. I think this dividend is a great way to receive
passive income. Companies that offer a strong dividend while growing their valuations are great
buys, and I believe that BlackRock fits this description.
I am definitely going to be buying more BlackRock shares.