With competitors of all sizes such as Merrill Lynch (NYSE:MER), Morgan Stanley (NYSE:MWD), and BlackRock (NYSE:BLK), the money-management industry may seem cutthroat to some investors. It is. It's also cyclical, subject to large downswings depending on the overall stock market. But money management can be very profitable.

When the stock market isn't sinking, the industry can boast high net-profit margins. Another benefit, and this is big for investors, is that companies in the industry are in almost no danger of obsolescence. This means that many are capable of realizing long-term growth in owner earnings, which is what makes a share of stock valuable, according to the discounted cash flow analysis.

Last week, Eaton Vance (NYSE:EV), an 80-year player in the money-management industry, put another drop in its owner earnings bucket when it announced second-quarter results. The all-important industry metric, assets under management, increased 16% over Q2 of last year. This increase obviously led to an increase in fees for the company, and these fees boosted overall revenue by 10% and net income by 7% over Q2 of last year.

In addition to this growth, management also has been repurchasing shares and paying a dividend. However, as seems to be common in money management firms, the repurchases are simply burning owner earnings as they struggle to keep pace with the number of options granted to employees. There's nothing wrong with the dividend, though, and it gives these shares a yield of a little over 1%.

One problem with the quarter: the 16% growth in assets under management only translated into 7% net income growth. This is mainly due to a smaller amount of fees charged as a percentage of managed assets. Investors are shying away from Eaton Vance's Class B funds, which charge distribution fees. (That's a good thing from a Foolish perspective, but understandably, Eaton Vance can't be thrilled about it.)

Aside from this problem, Eaton Vance isn't in a bad spot. It has shown solid growth over the past year, with little help from acquisitions. It has a long, profitable history as a public company, and the balance sheet has little debt. Slow down the share dilution, knock the stock price down 20%, and shares in Eaton Vance begin to look much more attractive.

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Fool contributor Matt Thurmond owns no shares in any company mentioned in this article.