3 Reasons We Love SEI Investments (SEIC)

SEI Investments has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 14.8% to $86.03 per share while the index has gained 15.9%.

Is now the time to buy SEIC? Find out in our full research report, it’s free.

Why Is SEI Investments a Good Business?

Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ:SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.

1. Revenue Climbing Higher

We at StockStory place the most emphasis on long-term growth, but within financials, a stretched historical view may miss recent interest rate changes, market returns, and industry trends. SEI Investments’s annualized revenue growth of 8.1% over the last two years is above its five-year trend, suggesting some bright spots.

2. EPS Moving Up Steadily

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

SEI Investments’s EPS grew at a decent 11.4% compounded annual growth rate over the last five years, higher than its 5.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

3. Stellar ROE Showcases Lucrative Growth Opportunities

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, SEI Investments has averaged an ROE of 26.7%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows SEI Investments has a strong competitive moat.

Final Judgment

These are just a few reasons why we think SEI Investments is a high-quality business, but at $86.03 per share (or 16.7× forward P/E), is now the right time to buy the stock? See for yourself in our comprehensive research report, it’s free.

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