Does Morgan Stanley's Liquidity Cushion Support Its Capital Returns?

Core Insights - Morgan Stanley (MS) has a robust liquidity position with average liquidity resources of $385.9 billion as of December 31, 2025, and long-term debt of $341.7 billion, of which $26.2 billion is due within the next 12 months [1][10] - The company maintains strong investment-grade long-term credit ratings (A1, A-, A+) from major rating agencies, indicating low credit risk and a solid financial position [2] - Morgan Stanley has successfully passed the 2025 stress test and has increased its quarterly dividend by 8% to $1.00 per share, with a historical annualized growth rate of 17.16% over the past five years [3][10] - The company has reauthorized a share repurchase program of up to $20 billion, with $17.4 billion remaining as of December 31, 2025, positioning it well for sustained capital returns [4] Capital Returns Comparison - Compared to peers, Goldman Sachs has raised its dividend by 12.5% to $4.50 per share and has a share repurchase program of up to $40 billion, with nearly $32 billion remaining [5] - JPMorgan has also increased its quarterly dividend by 7% to $1.50 per share and authorized a new share repurchase program worth $50 billion, with $33.8 billion remaining [6][7] Price Performance and Valuation - Morgan Stanley's shares have appreciated by 30.2% over the past year [8] - The company trades at a price-to-tangible book (P/TB) ratio of 3.34X, which is above the industry average [11] Earnings Estimates - The Zacks Consensus Estimate predicts an 8.6% year-over-year increase in Morgan Stanley's earnings for 2026, with a further growth rate of 7% expected for 2027 [13]