John Buckingham is a leading value investor and money manager; in his newsletter, The Prudent Specul...
SEI Corporation: Managing Wealth for the Ultra-Rich
06/26/2020 5:00 am EST
While working toward a PhD at the Wharton School, Alfred West developed the first computer-based commercial credit simulator to train bank loan officers, explains Ingrid Hendershot, a value-oriented money manager and editor of Hendershot Investments.
In 1972, the firm reincorporated as SEI Corporation (SEIC) and began automating the back offices of trust departments throughout the country using a then novel recurring revenue business model. West took SEI public in 1981 and branched out into investment advisory and money management.
SEI Investments is a leading global provider of technology-driven investment processing, investment management and investment operations solutions that help corporations, financial institutions, financial advisors and ultra-high net worth families create and manage wealth.
Today, SEI Investments delivers comprehensive investment platforms, services and infrastructure through its 3,820 employees serving more than 11,300 clients globally, including 11 of the top 20 banks and 45 of the top 100 investment managers. In 2019, SEI’s revenues topped $1.6 billion, of which ninety percent was recurring.
With its business model focused on recurring revenue from assets under management and administration, SEI generates highly profitable operations.
Net profit margins and return on shareholders’ equity have averaged over 27% and 28%, respectively, during the last five years. SEI is committed to long-term shareholder value creation through strong financial performance, dividends and share repurchases.
SEI generates robust free cash flows, which have totaled about $2.3 billion over the last five years. SEI has paid dividends for 32 years. The dividend has increased for the past 13 years, compounding at an 8% annual rate during the last five years. SEI has also repurchased nearly $1.6 billion of its stock during the last five years.
SEI Investments is a high-quality company with a proven business model, profitable growth, robust free cash flows and a strong balance sheet which should position the firm well to weather the COVID-19 crisis. Investors should consider banking on SEI Investments for attractive long-term investment returns. Buy.
Related Articles on FINANCIALS
Repay (RPAY) is a “fintech” company that offers a a chance to invest in a small-cap comp...
Cboe Global Markets (CBOE) strikes us as one of the few reasonably priced growth companies, suggests...
Before the pandemic, the U.S. was already on a path to becoming a cashless society. Each year, more ...