Daily Stock Analysis: Westwood Holdings (WHG)

This week, I'm seeking a second stalwart dividend financial services sector representative for my new Ivy portfolio. 

Financial Services includes twenty industries ranging from Asset Management to 8 kinds of Banks, Credit, Exchanges, 6 kinds of Insurance, Savings, and all such financial concerns.

Today I'm reviewing a small-cap asset management company, named Westwood Holdings Group Inc. Its trading ticker symbol is WHG.

Westwood Holdings Group Inc., through subsidiaries, manages investment assets & provides services for its clients. It provides investment advisory services to corporate retirement plans, public retirement plans, endowments & foundations.

The company operates in two segments, Advisory and Trust. 

The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. 

The Trust segment offers trust and custodial services and participates in common trust funds that it sponsors to institutions and high net worth individuals.

Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.

I use three key data points to gauge the value of any dividend equity or fund like Westwood Holdings Group Inc. (WHG): 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys will finally unlock equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

WHG Price

Westwood's price per share was $36.83 at yesterday's market close. A year ago its price was $65.69 for a price drop of $28.86 per share for the year or a 44% downside. 

Assuming Westwood's price will trade in the range of $30 to $60 next year, Westwood's recent $36.83 price could drop by $2 and fall to $34.83 by mid-December, 2019. 

WHG Dividends

Westwood's most recent monthly dividend was $0.72 declared October 24th and paying out, January 2nd. 

That $0.72 quarterly stipend equates to an annual amount of $2.88 yielding 7.81% at yesterday's closing $36.83 price.

Gains For WHG?

Adding the $2.88 annual estimated dividend to my estimated $2 annual price downside estimate for Westwood Holdings Group Inc. (WHG) totals up to just a $0.88 potential gross annual per share gain, which will be further reduced by costs to trade the shares.  

For a little under $1,000.00 invested today at the $36.83 recent price, we would buy 27 WHG shares. 

A $10 broker fee paid half at purchase and half at sale costs us $0.37 per share. Subtract that $0.37 brokerage cost from the estimated $0.88 gross annual gain leaves a net gain of $0.51 X 27 shares = $13.77 for a 1.4% net gain on a $994.41 investment.

Therefore, Westwood Holdings Group Inc., whose trading ticker symbol is WHG, now shows a possible 1.4% net gain thanks to a 7.81% dividend yield. 

I'd not buy the sock now but wait until it shows some upward mobility. And capture a higher dividend yield. 

No brokers cover this stock:

So no pros are around to disagree with my gloomy view of this small-cap Texas asset manager.

Therefore, you can look at Westwood Holdings Group Inc. (WHG) and see it has made money, is making money, but could fall further to net only a 1.4% net annual gain out of that healthy 7.81% estimated dividend yield. It could be more, it could be less. 

The above speculation is based on past year performance. The actual results remain to be seen to determine if Westwood Holdings Group Inc. (WHG) is worth your time and money.