Stock Market

Assessing BlackRock Stock: The Pros and Cons of BLK for 2024 Investors

Of 13 analysts following Blackrock (NYSE:BLK) stock at Tipranks, 12 say buy it. This despite their own prediction of a meager 3.5% gain in BLK stock next year. They remain true even though, until very recently, Blackrock was going precisely nowhere on the year.

BLK stock is now up 6% for 2023 but was down 15% as recently as Oct. 27. The surge has everyone, including chart watchers, bullish for 2024. But Blackrock is not a stock for everyone.

Inside BLK Stock

Blackrock is America’s largest asset manager, with almost $9.5 trillion under its control. About 16% of that comes from holdings in the Cloud Czars themselves, and Nvidia (NASDAQ:NVDA). Its 13F filing is scrutinized like that of Berkshire-Hathaway (NYSE:BRK-A) (NYSE:BRK-B), but it also runs real estate and other assets for institutions.

Despite all this wealth going through its fingers, Blackrock’s market cap is under $112 billion.

That’s because Blackrock is mainly a passive investor, its profits flow through to others. Its own income is from investment advisory fees. In the September quarter, this came to about $3.5 billion. Net income came to $1.6 billion, $10.66 per share, and about half that or $5/share went out as dividends.

That dividend is the main reason to buy BLK stock. It’s $20 in cash each year, and up 50% in the last five years. The equity has risen less than 20% per year, but the stock is volatile, rising and falling with the market.

The Punching Bag

Most of what you read about Blackrock has nothing to do with this.

Because it holds a lot of everything for clients, Blackrock is a target for everyone’s political points. It owned gun manufacturers and oil companies. At one time it owned more coal power plants than anyone else. Blackrock has a billion-dollar mutual fund in China.

But when CEO Larry Fink tried to reverse some policies, committing the company to Environmental, Social, and Governance standards, the other side pounced.

The biggest risk to Blackrock may be Fink’s retirement. He’s 70 and says he’s grooming successors. But every new CEO wants to do things their own way. Will their way prove to be as profitable?

The Bottom Line

Fink himself offers the best reason not to buy Blackrock for 2024. He says next year will be a stock picker’s market.

Blackrock is too big to be a stock picker. In its various funds and management operations, it picks everything.

I’m left where I started. Blackrock is a solid dividend stock. It’s a good bet in a rising stock market. It’s no protection in a panic, and it won’t make you Blackrock rich. But it’s a good place to put some retirement money, either directly or in one of its iShares funds.

As of this writing, Dana Blankenhorn had LONG positions in MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.