Morgan Stanley (NYSE:MS) continues to impress investors through its strong financial performances and cash returns, thanks to its diversified business model. The company topped first quarter analysts earnings and revenue estimates by a wide margin of $0.12 per share and $410 million, respectively. Moreover, its revenue and earnings also increased substantially, when compared to recent periods.
MS net revenues were standing around $9.7 billion for the first quarter, compared to $7.8 billion in the same period last year, spurred by growth in Institutional Securities and Wealth Management revenue.
Its institutional securities revenue was standing around $5.2 billion, compared to $3.7 billion in the prior year period, indicating strength in its trading franchise and improved underwriting results. Revenue from wealth management increased to $4.1 billion from $3.6 billion in the first quarter of last year.
James P. Gorman, Chairman and Chief Executive Officer, stated, “We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions. We are confident in our business model and the opportunities ahead, while recognizing that the environment remains uncertain.”
Morgan Stanley also returned significant cash to investors in the form of dividends and buybacks. The company currently offers a quarterly dividend of $0.20 per share, yielding around 1.9%.
MS is likely to see high single-digit growth in its next quarterly dividend, as the strong earnings growth momentum offers room for potential dividend growth.
In addition to strong dividends, Morgan Stanley’s share price offers a buying opportunity for investors after a 6.5% selloff last month. The latest decline in Morgan Stanley’s stock price was driven by the Fed’s interest rate cut and Trump’s latest comments about low-interest rates. Therefore, buying MS shares for dividend and capital appreciation could be a good strategy.
The author does not own shares of MS.