(MER) - Topped the Street's estimate in 15 out of the past 16 quarters by an average margin of 14.0%

Merrill Lynch & Co., Inc. (MER), first highlighted as a Growth and Income pick on Dec 9, 2005, continues to perform quite well. The company exceeded analysts' earnings expectations in 15 out of the past 16 quarters by an average margin of 14.0%. Net revenues for both the second quarter and the first six months of the year marked new records. Earnings per share are forecasted to grow 12.3% over the next 3-5 years. MER has a current and five-year average dividend yield of 1.3%. Full Analysis Merrill Lynch & Co., Inc., through its subsidiaries, provides broker-dealer, investment banking, financing, wealth management, advisory, asset management, insurance, lending, and related products and services on a global basis. When MER was first presented as a Growth and Income pick on Dec 9, 2005, its strong history of exceeding analysts' earnings expectations was noted. By reporting three additional positive earnings surprises, MER has continued its winning ways. The company has now topped the Street's estimate in 15 out of the past 16 quarters by an average margin of 14.0%. Best of all, the stock is up 15% since its debut. In its most recent quarter, MER achieved a 5.2% positive earnings surprise when it posted second-quarter profits of $1.6 billion, or $1.63 per share. Compared to the prior-year period, earnings soared 43.0%. Net revenues came in at a record $8.2 billion, versus $6.3 billion in the second quarter of 2005. The company repurchased 41.4 million shares during the quarter for a total cost of $3 billion. MER is expected to release results for the third quarter on Oct 17. Net revenues of $16.1 billion in the first half of the year also marked a new record for the company, and were up 27.8% when compared to the first six months of 2005. Looking ahead, earnings per share are forecasted to grow 12.3% over the next 3-5 years. In an effort to expand its mortgage servicing business, and to compete with Lehman Brothers Holdings Inc.'s (LEH) mortgage division, MER announced on Sep 5 its intention to acquire First Franklin, the mortgage business of National City Corp., (NCC) for $1.3 billion. In a separate transaction, MER was expected to purchase $5.6 billion of First Franklin's originated mortgage loans. The Board of Directors declared a regular quarterly dividend of 25 cents per common share of stock on Jul 24. MER has a current and five-year average dividend yield of 1.3%. The company's return on equity of 15% is in line with the industry average. MER is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.6% since 1988. Because the Zacks Rank has a market cap bias, Growth & Income investors may find a greater number of large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2 Rank (Buy) stocks in their selection criteria. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home