Eaton Vance Corp. (EV) engages in the creation, marketing, and management of investment funds in the United States. It also provides investment management and counseling services to institutions and individuals. Further, the company operates as an adviser and distributor of investment companies and separate accounts.
Last week the company raised its quarterly dividend by 12.90% to 35 cents/share. This marked the 38th consecutive dividend increase for this dividend champion.
Eaton Vance has delivered a 9.10% annualized total return over the past decade.
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Eaton Vance has managed to grow dividends at an annualized rate of 8.50% over the past decade.Â
The company has managed to grow earnings at a rate of 8.60%/year over the past decade. this was helped by the fact that it managed to reduce the number of shares outstanding by 14% over the past decade. The rate of dividend growth has tracked the growth in earnings per share over our study period. The company earned $1.06/share in 2007, and managed to grow it to $2.42/share by 2017. Analysts expect that Eaton Vance will earn $3.21/share in 2018.
The company has been able to grow revenues by growing assets under management. Assets have increased by attracting new client inflows, acquiring assets through acquisitions and through price appreciation. Market appreciation is a strong long-term tailwind, which can grow assets under management and related fees over time. If customers add money to the base on a net basis, assets grow even further.Â
Good relative performance is rewarded with client inflows. In general, clients have tended not to move assets out once they have been invested. Inertia can be a powerful force. But you cannot blame them for staying – there is an opportunity cost associated with switching investment products and strategies. For other strategies focusing on tax managed assets, retirement plan assets or closed-end-funds, you have a more sticky asset base that is less likely to leave.
