BLACKSTONE INC (NYSE:BX) Meets Caviar Cruise Quality Investing Standards with Strong Growth and High ROIC

The Caviar Cruise stock screening strategy aims to find high-quality companies ideal for long-term, buy-and-hold investing. Based on the ideas of quality investing, which focuses on lasting competitive edges, solid profitability, and steady growth, the screen looks for firms with stable revenue and earnings growth, high returns on invested capital, reasonable debt levels, and strong cash flow. These factors help investors find businesses that can grow value over time, even if they are priced higher than average.

One firm that fits these strict standards is BLACKSTONE INC (NYSE:BX), a top global alternative asset manager. Blackstone’s operations, covering real estate, private equity, credit, and multi-asset strategies, have shown stability and the ability to grow, making it an attractive option for investors focused on quality.

Key Quality Metrics Supporting Blackstone

• Revenue & EBIT Growth
  Blackstone’s 5-year revenue CAGR of 15.9% and EBIT growth of 13.9% are above the Caviar Cruise minimum of 5% for both. This shows the firm’s success in growing its assets and fee-based earnings steadily. The close match between EBIT and revenue growth points to efficient operations, a sign of a high-quality business.

• High Return on Invested Capital (ROIC)
  With an ROIC (excluding cash, goodwill, and intangibles) of 19.9%, Blackstone exceeds the 15% target set by the screen. This highlights effective capital use, as the firm earns significant profits compared to its invested capital—a key feature for long-term value growth.

• Debt Management
  Blackstone’s debt-to-free-cash-flow ratio of 3.48 is well under the screen’s limit of 5, showing the company can handle its debts without stressing its cash flow. This fits with the quality investing focus on financial strength.

• Profit Quality
  The firm’s 5-year average profit quality—measured as free cash flow to net income—is 197.9%, far above the 75% minimum. This indicates Blackstone turns accounting profits into actual cash effectively, reducing dependence on non-cash adjustments and supporting earnings stability.

Fundamental Strengths and Considerations

Blackstone’s fundamental analysis report notes other strengths, such as:

• Strong profitability metrics, with a 31.9% return on equity (beating 96.6% of peers) and a 16.4% ROIC (higher than 91.6% of industry rivals).
• Solid growth potential, with analysts predicting 15.9% yearly revenue growth and 12.5% EPS growth in the near future.
• A consistent dividend history, though its payout ratio (200.7% of earnings) raises doubts about long-term sustainability.

However, the report also points out issues, like a high debt-to-equity ratio (1.56) and weak liquidity metrics (current and quick ratios below 1), which need careful review. Valuation is another concern, with a P/E of 34.01 indicating a higher price compared to peers.

Why These Metrics Matter for Quality Investors

The Caviar Cruise approach favors companies that can maintain growth without too much debt, earn high returns on capital, and keep cash flows strong—all areas where Blackstone performs well. While the valuation may seem high, quality investors often accept premium prices for firms with lasting competitive edges, as Blackstone’s diverse asset management platform offers.

For investors looking for similar opportunities, the Caviar Cruise stock screener provides a selected list of stocks meeting these high standards.

Disclaimer: This article is not investment advice. Conduct thorough research or consult a financial advisor before making investment decisions.