(MS) - Morgan Stanley - return on equity of 22% is in line with the industry average

Morgan Stanley (MS), a stock that we first featured on Mar 29, 2006, has continued its winning ways. The company has maintained its Zacks #1 Rank due to its history of topping analysts' expectations while experiencing upward estimate revisions. Earnings per share are projected to grow 12.6% over the next 3-5 years. MS has a current dividend yield of 1.7%. Full Analysis Morgan Stanley is a global financial services firm that operates in four segments: institutional securities, retail brokerage, asset management and Discover. With more than 600 offices in 30 countries, the company's diverse client base includes corporations, governments, financial institutions and individuals. When MS was first highlighted as a Growth and Income stock on Mar 29, 2006, it had topped the consensus earnings estimate for the past three quarters by an average margin of 24.8%. The company continued its winning ways by beating the Street yet again in its most recent quarter, and has now done so in 13 out of the past 15 quarters. Furthermore, and most importantly, it is still a Zacks #1 Rank. On Jun 21, 2006, MS posted second-quarter fiscal 2006 profits of $1.85 per share, surprising to the upside by a solid 28.5%. Earnings were almost a dollar better than the 86 cents per share achieved in the prior-year period. Net revenues soared 48.3% to a new record of 8.9 billion. Chairman and CEO John J. Mack stated, "I could not be more pleased with the outstanding results the employees of Morgan Stanley delivered in the second quarter. There is still a great deal of work to be done, but we are moving aggressively on many fronts and we see significant opportunities to create shareholder value." For the first six months of fiscal 2006, profits and net revenues were up 51.0% and 34.9%, respectively, when compared to the first six months of fiscal 2005. Earnings per share are projected to grow 12.6% over the next 3-5 years. Consensus estimates for this quarter and next jumped 11.4% and 4.2%, respectively, over the past 90 days. Profit forecasts for fiscal 2006 and fiscal 2007 have risen 12.9% and 6.0%, respectively, over the same time period. On May 31, 2006, the Board of Directors declared a quarterly cash dividend of 27 cents per share of common stock. The company's annual dividend was 80 cents per share in fiscal 2000 but has since jumped to $1.08 per share. MS is currently yielding 1.7%. Moreover, the company repurchased approximately 22 million shares of its common stock since the end of fiscal 2005. Its return on equity of 22% is in line with the industry average. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. Blog Home