Here's What Makes KKR Worth Investing for Solid Long-Term Returns

Earnings Growth and Revenue Strength - KKR witnessed earnings growth of 15.1% over the past three to five years, driven by organic growth and rising AUM balances [3] - The Zacks Consensus Estimate for earnings indicates a 37.7% year-over-year increase for 2024 and 30% growth for 2025 [4] - KKR's net revenues saw a CAGR of 43.3% in the last five years (ended 2023) with some volatility, and the trend persisted in the first nine months of 2024 [4] - The Zacks Consensus Estimate for revenues indicates a 24% year-over-year increase for 2024 and 18.6% growth for 2025 [5] AUM Growth and Ambitious Targets - KKR's total AUM saw a five-year (2018-2023) CAGR of 23.2%, with the trend continuing in the first nine months of 2024 [6] - KKR aims to reach at least $1 trillion in AUM in five years by scaling its core businesses [7] - The company expects to raise more than$300 billion of capital by 2026 across 30 investment solutions and three flagship strategies [11] - KKR projects fee-related earnings per share to be more than $4.50 (implying a 2023-2026 CAGR of 20$7 per share [12] - Adjusted net income per share is anticipated to be $7-$8 (implying a 2023-2026 CAGR of 30%) [12] Liquidity and Shareholder Rewards - As of Sept. 30, KKR had an outstanding debt of $8.8 million, lower than the cash and investments of$16.3 million, indicating a solid liquidity position [8] - KKR hiked its dividend 6% to 18 cents per share in March 2024 and has raised dividends five times in the last five years with an annualized growth rate of 7.1% [9] - The company has a share repurchase plan in place, with approximately $69 million of authorization remaining under the program as of October 2024 [10] Price Performance and Industry Comparison - KKR shares have skyrocketed 86.3% in the past year compared with the industry's rise of 42.2% [13] - The company currently carries a Zacks Rank 2 (Buy) [15] Other Key Picks in Asset Management - Victory Capital Holdings, Inc. (VCTR) sports a Zacks Rank 1 (Strong Buy) and its shares have gained 20.2% in the past three months [17] - Federated Hermes Inc. (FHI) carries a Zacks Rank 2 and its shares have rallied 14.5% in the past three months [18]