SEIC

SEI Investments is a high-quality, capital-light investment-processing and asset-management franchise that is firing on all cylinders. FY2025 revenue grew 8.1% to $2.30B, but profitability grew far faster: operating income +13.7% to $627M, net income +23.1% to $715M, and diluted EPS +27.7% to $5.63 — the latter amplified by a 3.7% reduction in share count. The margins are exceptional for the sector: operating margin 27.3% and net margin 31.1%, with ROE of 29.2%. After a flattish FY2021-2023 stretch, the past two years show a clear re-acceleration as new business and operating leverage compound.

The balance sheet is pristine — effectively debt-free with liabilities/equity of just 0.18x and $2.45B of equity. This is a recurring-revenue, asset-light model: capex is minimal ($22.6M) and operating cash flow of $608M funds heavy capital return. Management bought back $628M of stock (up 25.6%) and paid $124M in dividends in FY2025, returning well over its free cash flow and aggressively shrinking the share base — exactly the right move for a high-ROE business trading at a reasonable multiple.