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  • Writer's pictureMatt Wolodarsky

*Stock Idea* Generous investment bank has grown its dividend 7 times since going public 4 years ago

Company: Houlihan Lokey (NYSE: HLI)

Houlihan Lokey Inc (HLI) is an investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, valuation, and strategic consulting. The firm serves corporations, institutions, and governments worldwide with offices in the United States, Europe, and the Asia-Pacific region.

All data presented in article is current as of October 29, 2019.

One of the oldest independent investment banks around, HLI has a much shorter history as a public company. While the company only went public in 2015, all its key numbers have grown. They've grown revenues 13% per year for the last five years and profits more than 20%. They’ve increased their dividend by more than 7 times since 2015! The business growth seems to be a continuation of its steady growth over its 47+ years existence. The company has demonstrated its resilience over the years, where some of their competitors were sunk due to several economic crises over this period, not HLI. It has flourished over the years as a result of its quality, long-tenured management team, integrity and industry leading expertise. HLI has been recognized as the Top U.S. Mergers & Acquisitions Advisor and Top Global Restructuring Advisor, among other awards over the years. They beat out competitors such as Goldman Sachs, JP Morgan and Morgan Stanley for these accolades. The company plans to grow through acquisitions, continued expansion into Europe and Asia-Pacific and growing its average deal size.

Dividend Quality Analysis

The Bottom Line

Small company with a short public track record, HLI seems well positioned to continue to grow its dividend. I've taken a small position with the hypothesis that HLI will be a steady dividend grower and performer over the next 10 to 20 years.

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