AllianceBernstein: Dividend Drops, But Units Still Decently Priced
AllianceBernstein (AB) maintains a 'Buy' rating despite a 13.5% dividend cut to $0.83 per unit, supported by a still-attractive 10.1% yield and mixed Q1 results. Earnings per share met expectations at $0.83, but revenue fell short by $23.6 million, while net income rose 37% year-over-year. Soft EPS growth and active outflows have reduced the margin of safety, leading to a lowered fair value estimate of $43 per unit. Strategic positives include a record institutional pipeline and $100 billion in assets from the Equitable-Corebridge merger.
- ▪AllianceBernstein cut its dividend by 13.5% to $0.83 per unit but still offers a 10.1% yield.
- ▪Q1 EPS matched expectations at $0.83, but revenue missed by $23.6 million.
- ▪Net income increased 37% year-over-year, driven by cost controls and lower taxes.
- ▪The fair value estimate was reduced to $43 per unit due to narrower margins of safety.
- ▪A record institutional sales pipeline and $100 billion in expected new assets from the Corebridge merger are key growth catalysts.
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