For investors looking for high yield without the risk of rising interest rates, AllianceBerstein Holdings (AB) is definitely worth a look. The stock has a nice 6.62% dividend yield that has increased 64% in the past year. AB has an equity summary score of 9.8 out of 10 for a Very Bullish rating.
First Call consensus has EPS increasing 23% in 2013 and 13% in 2014. Analysts have a 12-month price target of $28.
AllianceBernstein’s first-quarter profit rose 44% as demand from institutional investors helped the money manager book its second-straight quarter of inflows.
Assets under management stood at $443.2 billion at the end of the quarter, up from $430 billion at the end of 2012 and $419.1 billion a year earlier. Market gains added $10.6 billion while the firm also drew a net $2.6 billion in investor cash.
Institutional demand accounted for the bulk of the inflow, contributing a net $3.3 billion and helping to offset a modest outflow from the firm’s private- client business.
“Momentum continued to build in our institutions channel, where gross sales nearly doubled year-over-year,” Chief Executive Peter Kraus said.
AllianceBernstein reported a profit of $38.5 million, or 38 cents a unit, versus a year-earlier profit of $26.7 million, or 26 cents a unit. Net revenue rose 4% to $709.1 million. Analysts expected earnings of 35 cents a unit on $684 million in revenue.
Total net revenues were up 4%, year to year, in the first quarter, driven by base investment management fees and easy comparisons. We expect revenues to be up in the mid- to high single digits in 2013 and 2014 given easier comparisons and contraction of equity assets to the point where fixed income inflows are able to offset equity outflows.
The company has made progress in improving efficiency from cost-cutting efforts and has recently seen an encouraging turnaround in asset flows, but there is still work to do to improve equity fund performance.