BlackRock Inc. (NYSE: BLK) is the world’s largest asset manager with $8.67 trillion in assets under management in January 2021.
Mr. Market loves BlackRock (BLK), he was paying $694.50 for its stock on 27 February 2021. Over the past year, Mr. Market’s love for the stock has grown. He paid $475.82 for BlackRock on 27 February 2020.
Value investors; however, will ask if BlackRock makes money and will make money in 2021? I think BlackRock will make money in 2020 because it made money in 2020.
Does BlackRock Make Money?
BlackRock (NYSE: BLK) reported a quarterly gross profit of $4.478 billion and quarterly revenues of $4.478 billion on 31 December 2020.
BlackRock reported a quarterly operating income of $1.848 billion on 31 December 2020. In 2020, the quarterly gross profit and quarterly revenues grew from $2.977 billion on 31 December 2019. Plus, the quarterly operating income grew from $1.538 billion on 31 December 2019.
Stockrow reported no quarterly income numbers for BlackRock on 31 December 2020. Conversely, BlackRock reported a quarterly operating cash flow of $995 million on 30 September 2020. There was an ending quarterly ending cash flow of $1.041 billion on 30 September 2020.
How Much Cash Does BlackRock Have?
BlackRock (BLK) had $6.507 billion in cash and short-term investments on 30 September 2020. There was no cash and short-term investments listed on 31 December 2020.
I think the cash and short-term investments is low for a financial services company. BlackRock is supposedly a massive and enormously wealthy asset manager. Yet it had only $6.507 billion in cash on 30 September 2020. However, the cash and short-term investments rose from $4.829 billion on December 31, 2020.
However, BlackRock had limited amounts of debt. It reported a quarterly financing cash flow of $0.00 on 30 September 2020. BlackRock reported total debts of $15.137 billion on 31 December 2020. The total debts fell from $21.557 billion on 30 September 2020.
What Value Does BlackRock Have?
BlackRock Inc. (NYSE: BLK) had $161.118 billion in total assets on 30 September 2020. BlackRock did not report its assets on 31 December 2020.
In 2020, BlackRock’s total assets fell from $168.622 billion on 31 December 2019. BlackRock reported $33.392 billion in common equity and $33.932 billion in shareholders’ equity on 30 September 2020.
I think Mr. Market grossly overvalues BlackRock stock I see nothing in these figures that justifies $694.50 a share. Smart investors will avoid BlackRock.
Is BlackRock a Good Dividend Stock?
I think the only good thing about BlackRock (NYSE: BLK) is the dividend. BlackRock will pay a quarterly dividend of $4.13 on 23 March 2021.
That dividend grew from $3.63 on December 12, 2020. Thus, BlackRock’s dividend grew by 50₵ in a quarter.
Overall, BlackRock paid a forward annualized dividend of $16.52 and a forward dividend yield of 2.35% on February 22, 2021. Thus, BlackRock is a great dividend stock, but a poor value stock.
I advise investors to stay away from BlackRock until its shares fall to under $300. Until then, BlackRock is too expensive even with a $4.13 quarterly dividend. Smart people will avoid BlackRock stock.
Originally published at https://marketmadhouse.com on February 23, 2021.
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