Investment Giant BlackRock's Strong Finish To 2023: Dividend Boost, Accretive Acquisition & More

BlackRock Inc BLK reported Q4 FY23 revenue growth of 7% Y/Y to $4.631 billion, marginally above the consensus of $4.627 billion. 

Investment advisory, administration fees, and securities lending revenues increased to $3.61 billion from $3.40 billion a year ago, led by market beta on average AUM, positive organic base fee growth, and higher securities lending revenue.

Technology services revenue increased to $379 million from $353 million the prior year, reflecting the onboarding of several large clients. 

BLK stated that the net inflow stood at $96 billion in Q4 and $289 billion in FY23. 

Adjusted operating income rose 9% Y/Y to $1.72 billion, with margin expanding 40 bps to 41.6%.

Adjusted EPS increased 8% Y/Y to $9.66, beating the consensus of $8.84.

Total AUM stood at $10.0 trillion as of December 30, 2023, compared to $8.6 trillion in Q4 FY22.

Dividend: BLK’s Board of Directors approved an increase of 2% in the quarterly cash dividend per share to $5.10, payable on March 22, 2024, to shareholders of record as of March 7, 2024. The company repurchased shares worth $1.5 billion in FY23. 

Laurence D. Fink, Chairman and CEO said, “We always viewed ETFs as a technology, a technology that facilitated investing. And just as our Aladdin technology has become core to asset management, so too have ETFs. That’s why we believe embedding our ETF and Index business across the entire firm will accelerate the growth of iShares and every investment strategy at BlackRock.”

Related: BlackRock and Ark Slash Fees on Bitcoin ETFs: A Race to Win Investors

Acquisition: BLK penned a deal to acquire independent infrastructure fund manager Global Infrastructure Partners for $3 billion in cash and approximately 12 million BLK shares.

“The combination of BlackRock infrastructure with GIP will make us the second largest private markets infrastructure manager with over $150 billion in total AUM, providing clients – especially those saving for retirement – with the high-coupon, inflation-protected, long-duration investments they need,” added Fink.

GIP has over $100 billion in AUM across infrastructure equity and credit strategies supported by approximately 400 employees.

The deal is expected to be modestly accretive to BlackRock’s as-adjusted earnings per share and operating margin in the first full year post-close.

Also Read: BlackRock’s Rick Rieder Dismisses Recession Fears, Says Stocks Could Surge Up To 12% In 2024

Price Action: BLK shares are trading lower by 0.59% at $787.95 premarket on the last check Friday.