Janus Capital Group Beats 1Q15 Estimates (Part 5 of 5)
Growth stock
Janus Capital Group (JNS) has returned more than 60% since it hired Bill Gross from PIMCO (Pacific Investment Management Company). Gross was brought on to build strong debt fund management at Janus Capital. The company has expanded its debt offerings and has already returned a higher return than the benchmark.
In the past month, the stock has returned 4%, mainly on expectations of strong asset-base growth as well as on the performance of the funds. The company has outperformed in the equities category in the current quarter, attracting new investments and driving market appreciation.
Janus Capital also announced a quarterly dividend of $0.09 per share, with an annualized dividend yield of 1.95%. When combined with the stock appreciation, investors can consider the stock for growth or as a retirement option.
Premium valuations
Janus Capital stock is currently trading at 16.9x on a one-year-forward-earning basis. In comparison, its peers are trading at 15.8x. The company has historically traded at a discount to its peers, but since hiring Bill Gross, has enjoyed higher multiples. A year ago, Janus Capital was trading at around 13x compared to its peers that were trading at 14.5x.
The company needs strong fund managers and products if it’s to consistently attract higher capital in the future. In attracting such capital it competes with Franklin Resources (BEN), Federated Investors (FII), BlackRock (BLK), T. Rowe Price Group (TROW), Vanguard, American Funds, State Street (STT), Legg Mason (LM), Morgan Stanley (MS), Goldman Sachs (GS), Invesco (IVZ), and Affiliated Managers Group (AMG). Together, these companies make up 9.66% of the Financial Select Sector SPDR Fund (XLF).
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