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Morgan Stanley, a global financial services company, provides investment banking services and products to its clients. The company also owns a dividend stock called the Morgan Stanley stock. The company’s services cater to businesses, financial institutions, governments and individuals. The company also has several business segments, including wealth management, institutional securities and investment management.
Morgan Stanley Services and Offers
While the institutional services sector provides capital raising services, financing services, and financial advisory services, the wealth management sector provides investment advisory and brokerage services for various investments. These include precious metals, fixed income securities, futures, stocks, options, unit investment results, mutual funds, structured products, mutual fund asset allocation programs, separately managed accounts and managed futures.
The Investment Management segment offers clients and customers real estate, commercial banking, fixed income, and equity strategies. Founded in 1935, the company is still going strong and is one of the most attractive contenders in the market.
As can be seen, the company plays a huge role in the financial service delivery industry. Does this make Morgan Stanley stock worth the investment? Details here.
Morgan Stanley’s current stock price
As of December 28, 2021, Morgan Stanley stock is trading at $99.97, with a 0.43% drop in price over the past 24 hours. The stock has a market capitalization of $179.387 billion.
Is Morgan Stanley a buy?
Checking financial ratios and metrics is one of the best ways to determine if a stock is worth investing in. Here are some Morgan Stanley stock metrics.
Share price to earnings ratio
The price-to-earnings ratio is the ratio for determining the value of a company that measures its share price in relation to earnings per share. The metric is also called the earnings multiplier or the price multiplier. Analysts and investors use price-to-earnings ratios to determine the relative value of an organization’s shares. The scale can also be used to compare a company’s performance well against its historical records.
The price-to-earnings ratio shows how much investors are willing to pay for every dollar of earnings a stock provides. It can be used to compare a stock’s performance to what it has been in the past and how it compares to the industry average.
Morgan Stanley’s PE ratio is 12.77. On average, the price-to-earnings ratio for the S&P 500 index is around 30.15. The price/earnings level of Morgan Stanley indicates that the stock is undervalued compared to its competitors. Hence, it is time to invest in stocks now. Furthermore, Morgan Stanley’s forward P/E ratio, the price to 2021 earnings, is higher than the company’s current P/E ratio.
With this in mind, investors can expect the company’s share price to increase in the future.
MS stock price-to-sales ratio
The P/S ratio compares a stock’s current price with its total sales. The lower the better. Some investors value this metric more than others when it takes into account sales. Since it is difficult to manipulate sales using accounting tricks, the price-to-value ratio is a reliable metric for determining a company’s performance.
Morgan Stanley has a P/S ratio of 3,307 as of December 28, 2021. Because it is below the market average, the number indicates an undervalued trade by historical standards.
Brand value points
Morgan Stanley’s current brand value score is A, making it among the best stocks of the year. The stock’s high rating makes it a good investment for value investors.
MS Stock Price to Cash Flow Ratio
The P/CF ratio is another indicator of a stock’s value because it measures the value of a stock in relation to each stock’s operating cash flow. The price-earnings/CF ratio for Morgan Stanley’s stock is 10.94, which is better than 11.78, the industry average.
Judging from all of these factors, the Morgan Stanley stock is a solid investment with the potential to produce results for value investors.
Why invest in Morgan Stanley stocks?
Aside from impressive financial metrics and ratios, a few other reasons why the Morgan Stanley stock is a good buy.
The organic growth of the company is very impressive and it is expected to follow the same trend in the future as well. Certain factors, including commercial activities, improvements in corporate lending and strategic acquisitions, are boosting the company’s revenue.
During the pandemic, the US Federal Reserve has restricted share buybacks and dividends by major banks, including Bank of America, JPMorgan Chase and Goldman Sachs, to preserve liquidity.
Morgan Stanley has not repurchased any shares in 2020. But now that the decision has been approved by the Federal Reserve, the company will buy back shares in 2021 and double its dividend at 70 cents per share. Because Morgan Stanley has a remarkable earnings strength and liquidity position, the company is expected to enhance shareholder value by employing capital efficiently in the coming years.
Compared to the industry average, Morgan Stanley’s earnings have increased significantly in the past few years. Analysts expect the company’s earnings to grow 11.1% in 2022.
Additionally, in the majority of financial quarters, Morgan Stanley’s earnings in the past have been more than forecast by Zacks Consensus Estimate.
Take the final
Given the financial metrics and Morgan Stanley’s standing in the industry, the company’s stock is a worthwhile investment. In addition, Morgan Stanley has a strong balance sheet that creates positive investor sentiment about the company’s stock.
The bank also has big plans for 2022, which will positively affect Morgan Stanley stock prices.
good to know
Although financial ratios are a good indicator of a stock’s valuation, there are times when you need to adjust. This leads many investors to use regular financial statements to better analyze the company’s growth rate and earnings strength. Therefore, along with checking your financial ratios and key metrics, you should also keep abreast of news regarding the institutions whose shares you want to buy or invest in.
Information is accurate as of December 28, 2021.
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