SEI Investments beats expectations with record Q4 earnings
Financial services provider expands margins, raises dividend 6% as operating income surges 11%
SEI Investments delivered better-than-expected fourth-quarter results, with the financial services provider posting record sales and expanding margins across all business segments, sending shares higher in early trading.
The Pennsylvania-based company reported diluted earnings per share of $1.19, representing a 31% increase from the prior-year period and exceeding analyst estimates. Revenue for the quarter climbed 15% year-over-year to $557.19 million, beating projections as all business segments contributed to the growth.
Operating margins expanded to 26%, with operating income rising 11% year-over-year, according to the company's official earnings release. Annual sales events reached a record $149.9 million, underscoring strong demand for SEI's investment processing and management solutions.
"This was an exceptional fourth quarter, capping one of the strongest years in SEI's history," the company's chief executive said in the earnings statement, highlighting momentum across the firm's global operations.
The board of directors approved a 6% dividend increase, raising the quarterly payout to $0.52 per share, up from $0.46. SEI also returned substantial capital to shareholders through buybacks, repurchasing 1.2 million shares for $101 million during the quarter. The full-year buyback program was even more robust, with 3.1 million shares repurchased for $259.5 million at an average price of $83.43 per share.
SEI manages, administers, or advises approximately $1.6 trillion in assets across its four primary business segments: Private Banks, Investment Advisors, Institutional Investors, and Investment Managers, including a minority interest in LSV Asset Management. The company's diversified client base helped drive the strong quarterly performance despite broader market volatility.
For the full year 2024, revenue reached $2.125 billion, a 10.7% increase from 2023, while diluted EPS grew 27% to $4.41. Operating income for the year increased 30%, demonstrating the operating leverage in SEI's business model.
Analysts have maintained a positive outlook on the stock, with a consensus rating of "Outperform" and an average price target of $98.83, according to recent analyst coverage. The stock currently trades at approximately 15.7 times trailing earnings, slightly below its five-year average.
Looking ahead, management said it remains focused on maximizing returns across global segments and solutions, positioning the company for continued growth into 2025. The firm's emphasis on technology and operational efficiency has helped it capture market share in the competitive asset management and wealth management sectors.
SEI shares have gained approximately 35% over the past 12 months, outperforming the broader financial services sector and the S&P 500. The stock is currently trading above its 50-day moving average of $83.12 but below its 52-week high of $93.38 reached in December.
The dividend increase marks SEI's commitment to returning capital to shareholders, with the company now offering a dividend yield of approximately 1.1%. The combination of share buybacks and dividend growth has made SEI an attractive income play for value-oriented investors seeking exposure to the asset management space.
Institutional investors hold approximately 74% of SEI's outstanding shares, indicating strong institutional confidence in the company's long-term prospects. The stock's beta of 0.97 suggests its price movements closely track the broader market, providing investors with a stable entry point into the financial services sector.