Updated 3/11/25

Morgan Stanley has built a reputation as one of the biggest names in global finance. From investment banking to wealth management, it has its hands in almost every corner of the financial world. With a history dating back to 1935, this company has navigated market ups and downs while continuing to deliver value to shareholders.

For those focused on dividends, Morgan Stanley presents an interesting case. It offers steady payouts, has shown a commitment to dividend growth, and operates from a position of financial strength. But is it the right fit for an income-focused portfolio? Let’s take a closer look.

Key Dividend Metrics

📈 Forward Dividend Yield: 3.31%
💰 Annual Dividend Per Share: $3.70
📆 Ex-Dividend Date: January 31, 2025
💵 Payout Ratio: 44.65%
📊 5-Year Average Dividend Yield: 3.00%
📈 Dividend Growth: Consistent annual increases

Dividend Overview

Morgan Stanley currently offers a dividend yield of 3.31%, slightly higher than its five-year average. That makes it an appealing option for income investors, especially when paired with the company’s history of regular dividend increases. A payout ratio of 44.65% suggests the dividend is well-supported by earnings, leaving room for potential hikes in the future.

Compared to other financial stocks, Morgan Stanley sits in the middle of the pack—its yield isn’t the highest, but it’s also not at risk of being cut. The company has consistently distributed profits to shareholders while retaining enough earnings to reinvest in growth. That balance is key for long-term dividend stability.

Dividend Growth and Safety

Steady dividend growth is a sign of a financially healthy company. Over the years, Morgan Stanley has rewarded investors with reliable increases, and that trend looks set to continue.

Earnings per share currently sit at $7.95, comfortably covering the dividend payments. Even if the market faces a downturn, the company has a strong cushion to maintain payouts. With a payout ratio below 50%, there’s still room for expansion, though future hikes may depend on economic conditions and interest rates.

The biggest potential risk to dividends would come from a financial crisis or an unexpected decline in profitability. However, Morgan Stanley’s strong cash flow and capital reserves suggest it is well-prepared for market fluctuations.

Chart Analysis

Trend and Moving Averages

Morgan Stanley’s stock has been in a clear uptrend for most of the past year, but the recent decline is catching attention. The price has fallen sharply from its peak above 140 and is now testing the 200-day moving average. This long-term support level often serves as a key indicator of whether a stock remains in a bullish phase or is shifting into a deeper correction.

The 50-day moving average, which reflects short-term momentum, has started to roll over. This suggests that the recent drop isn’t just a brief pullback but rather a potential trend shift. If the price stays below this shorter-term moving average for an extended period, it could indicate further downside pressure.

Volume Activity

Trading volume has picked up significantly during the recent decline. A rise in volume on a selloff can sometimes signal panic selling or a shift in sentiment. When volume spikes like this, it usually means large investors are repositioning, which could lead to continued volatility.

Earlier in the uptrend, volume was generally steady with periodic surges on strong buying days. However, the latest downward move has seen an increase in red bars, meaning more shares are being sold than bought. This shift in volume behavior suggests that demand may be weakening.

Relative Strength Index (RSI)

The RSI indicator has been steadily declining and is now approaching oversold territory. When the RSI drops below 30, it often signals that the stock is reaching an area where buyers might step in. However, an oversold reading alone doesn’t guarantee a rebound—it just means that the stock has been heavily sold in the short term.

The RSI had been hovering in the higher range during the stock’s rally, which confirmed the strong momentum. Now that it’s falling, it reflects the shift in sentiment and increased selling pressure. If RSI stays low for an extended period, it may indicate that the downward move still has more room to go.

Recent Price Action and Candlestick Behavior

Looking at the last five trading days, the stock has been making lower highs and lower lows, which is a classic sign of a downtrend. The most recent candlestick has a relatively small body with a lower wick, suggesting some buying interest near the day’s low, but not enough to reverse the trend.

The previous few sessions have shown strong red candles with little to no upper wicks, meaning sellers have been in control throughout the day. There hasn’t been much sign of a reversal pattern yet, such as a hammer or bullish engulfing candle, which would indicate a shift back to buying strength.

Key Levels to Watch

The 200-day moving average is the key technical level right now. If the stock holds above this level and stabilizes, it could suggest that the longer-term trend remains intact. However, a decisive break below this moving average could lead to further downside, potentially bringing the stock closer to previous support levels near 100.

On the upside, the 50-day moving average is now acting as resistance. If the stock attempts to bounce, reclaiming that level would be an important signal that buyers are regaining control. Until then, the technical setup leans bearish in the short term.

Analyst Ratings

📊 Morgan Stanley’s stock has recently experienced a mix of analyst evaluations, reflecting both optimism and caution. The consensus among 24 analysts is a Hold recommendation, with an average 12-month price target of $119.25. This suggests a potential upside of approximately 6.4% from the current share price of $112.04. Price targets among analysts range from a low of $79.15 to a high of $156.00.

Upgrades 📈

🔹 On January 17, 2025, Barclays analyst Jason Goldberg reiterated an Overweight rating on Morgan Stanley, setting a price target of $156.00. Goldberg’s optimism stemmed from the firm’s robust earnings report and strategic initiatives expected to drive future growth.

🔹 Similarly, on January 21, 2025, UBS analyst Brennan Hawken maintained a Neutral rating on Morgan Stanley, with a price target of $140.00. Hawken’s stance was based on the company’s strong financial performance and growth prospects.

Downgrades 📉

🔻 In contrast, on November 26, 2024, HSBC analysts downgraded Morgan Stanley from a Buy to a Hold rating, while raising the price target from $128.00 to $131.00. This cautious approach was due to concerns about potential headwinds in the financial sector, including regulatory challenges and market volatility.

🔻 Additionally, on October 23, 2023, Odeon Capital analyst Richard Bove issued a Sell rating on Morgan Stanley, with a price target of $79.15. Bove’s decision reflected apprehensions about the broader economic environment and its possible impact on the bank’s performance.

📌 These mixed analyst perspectives highlight the complexities in assessing Morgan Stanley’s stock, balancing its strong financials against external economic factors.

Earnings Report Summary

Morgan Stanley wrapped up the fourth quarter of 2024 on a strong note, delivering impressive numbers across the board. Revenue came in at $16.2 billion, a solid jump from the $12.9 billion reported in the same period last year. That brought total revenue for the full year to $61.8 billion, marking a steady climb from $54.1 billion in 2023. Net income also saw a major boost, more than doubling to $3.7 billion for the quarter compared to $1.5 billion a year ago. Earnings per share landed at $2.22 for the quarter, bringing the full-year figure to $7.95.

A big part of the momentum came from the Institutional Securities division, which had a standout quarter. Revenues in that segment surged to $7.3 billion, significantly higher than the $4.9 billion from last year. Investment banking activity picked up, with revenue climbing 25% to $1.6 billion as deal-making made a comeback. Equity trading saw an even bigger jump, up 51% to $3.3 billion, while fixed income trading revenue climbed 35% to $1.9 billion, helped by a more volatile market.

Wealth management continued to be a reliable engine of growth, bringing in $7.5 billion in revenue for the quarter, up from $6.6 billion in the same period last year. Clients kept pouring money in, with net new assets hitting $56.5 billion for the quarter, pushing total client assets to an impressive $7.9 trillion. Fee-based assets reached $2.3 billion, a sign that clients are sticking with Morgan Stanley’s advisory services.

The investment management business also held its ground, pulling in $1.6 billion in revenue for the quarter, slightly up from the $1.5 billion reported in the previous year. Assets under management grew to $1.7 trillion from $1.5 trillion, reflecting a combination of new inflows and market gains.

Morgan Stanley’s results show a company that continues to benefit from its diversified business model. Strength in trading and investment banking helped drive revenue growth, while the steady expansion of wealth and investment management provided a more stable foundation. Even in a challenging economic environment, the firm’s strong finish to the year signals confidence moving forward.

Financial Health and Stability

A good dividend stock isn’t just about yield—it’s also about financial strength. Morgan Stanley checks a lot of the right boxes when it comes to stability.

• Profit margin: 21.77%
• Operating margin: 37.10%
• Return on equity: 13.17%
• Revenue growth (year-over-year): 24.9%

The company has a strong capital base, with total cash reserves of $532.66 billion. That provides a significant cushion against potential downturns. On the flip side, the company does carry a high debt load, with a debt-to-equity ratio of nearly 400%. While this is common for financial firms, it’s something investors should keep an eye on.

One reassuring factor is the current ratio of 2.09, meaning short-term liabilities are well covered. While debt is a consideration, Morgan Stanley’s ability to generate strong cash flow helps offset some of that concern.

Valuation and Stock Performance

At 14.05 times trailing earnings, Morgan Stanley’s valuation appears reasonable. The forward price-to-earnings ratio of 13.14 suggests the stock is trading at a fair multiple compared to expected future earnings.

A look at the stock’s recent performance shows some volatility, but nothing unusual for a financial stock.

• 52-week high: $142.03
• 52-week low: $85.01
• Current price: $112.04
• 200-day moving average: $114.57

The stock is currently near its 200-day moving average, a level that often acts as support or resistance. Investors should expect some fluctuations, but for those focused on dividends, short-term price moves aren’t the main concern.

Risks and Considerations

While Morgan Stanley’s dividend looks solid, there are a few risks investors should be aware of.

🔻 Economic Sensitivity – As a financial services company, Morgan Stanley’s revenue depends on the broader economy. A slowdown in investment banking or wealth management could impact profits.

💳 High Debt Levels – The company’s debt-to-equity ratio is on the high side. While manageable for a financial firm, it’s something to monitor.

📉 Stock Price Volatility – The stock has a beta of 1.35, meaning it tends to be more volatile than the broader market.

💸 Regulatory Risk – The financial sector is heavily regulated, and any changes in banking laws could affect Morgan Stanley’s profitability.

Final Thoughts

For dividend investors, Morgan Stanley presents a strong combination of income, stability, and financial strength. The current yield of 3.31% is attractive, and the company has a track record of consistent dividend growth.

With a payout ratio under 50% and solid earnings, the dividend looks secure for the foreseeable future. The biggest risks come from economic cycles and potential regulatory changes, but overall, Morgan Stanley remains a well-positioned stock for those looking to generate passive income.

While price volatility is part of the package, long-term investors may find the steady dividends and financial resilience to be a compelling reason to keep an eye on this stock.