The Top 25 Year Performer

04/22/2005 12:00 am EST

Focus:

Kelley Wright

Managing Editor, Investment Quality Trends

I'm very much looking forward to seeing Kelley Wright in Las Vegas. While I've followed IQ Trends for two decades, this will be his first Money Show workshops. Here, as a sample of his research, he looks at the best performing stock from over the last 25 years.

"Eaton Vance (EV NYSE) is a familiar name to the financial management community. The company was founded in 1924 and is one of the oldest financial services firms in the US. Eaton Vance manages more than 150 types of portfolios, focused on varying tax implications pertaining to wealthy investors and institutions. In 2004, EV managed $94 billion in assets. Over the last few years, the firm has undertaken significant acquisition activities. In 2001, the company paid $75 million for a 70% equity stake in Atlanta Capital Management and $32 million for an 80% equity stake in Fox Asset Management and in 2003 it paid $28 million for an 81% profits interest in Parametric Portfolio Associates, whose specialty is to design portfolios which outperform client-specified benchmarks.

"The close of the first quarter of 2005 marked a 17% increase in assets under management from the same period in 2004. Diluted earnings per share rose to $0.27 from the $0.22 made during the same period in 2004. Revenues rose 16% from the first quarter of 2004. Overall results were strong, but fell short of Wall Street expectations, leading to reserved selling. After a series of dividend increases EV is once again close to its historic levels of high dividend yield, suggesting the shares have just 7% downside risk compared to 86% upside potential. Its strong growth has made several dividend increases possible, paving the way for its return to Undervalue. The shares offer a history of strong dividend growth, a low payout ratio, a great balance sheet, and good prospects for future growth. Investors will find the shares trading at Undervalue up to a price of about $24 per share."

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