One of the fastest-growing brokerage firms has shown up on our radar screen; Raymond James (RJF) recently moved up after handily beating Street estimates for the fourth time in a row, notes Mark Skousen, editor of Five Star Trader.
Based in St. Petersburg, Florida, Raymond James is a global financial services company that is competing with the leaders in the sector. In addition to offering brokerage services, it provides portfolio management to private clients, investment banking, private equity and commercial real estate.
It's also famous for its annual stock portfolio beating the market. One of my long-term friends, Martin Truax, is a senior vice president of Raymond James offices in Atlanta, and he is glad he switched to Raymond James several years ago.
Business is booming. Last year, client assets under administration rose by 23% to $1.26 trillion, and financial assets under management climbed by 20% to $203.2 billion. Profit margins are rising to 15%. Net profits jumped by 43% to $1.5 billion in 2021 on revenues of $10.4 billion.
It has had a rising dividend policy since 1986, and it just raised its dividend last month from $0.26 a share to $0.38. Raymond James has $20 billion in cash, which is plenty to acquire additional assets, and only $3.8 billion in long-term debt.
Wall Street analysts project that RJF stock could hit $133 a share this year, and given that it's only selling for less than 14 times forward earnings, there’s plenty of upside potential.
Let’s add Raymond James to our Five Star Trader portfolio today and set a protective stop of $87 a share. For those who are willing to take greater risks, consider buying the RJF May $120 call options, which last traded for around $1.90 and expire on May 20.
