BLK - Waddell & Reed Has A 5.9% Dividend Yield But Is It A Value Stock Or A Value Trap?
Overview and Thesis
In this article, I discuss Waddell & Reed Financial Inc. (WDR), an investment advisory and asset management firm. The company has an above market average dividend yield of 5.9% due to an almost 80% decline in stock price since its peak in early 2014. The current PE ratio is 7.4, almost half of its 10-year average and below the average of the S&P 500. Furthermore, the balance sheet has a net cash position, hardly the sign of a company in financial distress. However, Waddell & Reed is facing significant challenges