Source: T. Rowe Price – TROW – Stock Price Today – Zacks
As you can see, T. Rowe Price has increased its dividend every year since 1987, making it a dividend aristocrat. The company has a payout ratio of 68%, which is sustainable and leaves room for future dividend growth. The company has a dividend growth rate of 11.8% for the past five years and 10.4% for the past 10 years, which is well above the inflation rate and the industry average. The company has also paid out special dividends in 2012 and 2015, which shows its commitment to returning excess cash to its shareholders.
Peer Comparison
T. Rowe Price is one of the leading players in the asset management industry, which is highly competitive and fragmented. The company faces competition from various types of rivals, such as banks, insurance companies, brokerage firms, hedge funds, private equity firms, and other asset managers. Some of the company’s main competitors are:
- BlackRock, Inc. (BLK): BlackRock is the world’s largest asset manager, with more than $9.5 trillion in AUM as of September 2023. The company offers a wide range of investment products and services, including mutual funds, ETFs, index funds, alternative investments, advisory services, and more. The company is known for its iShares brand, which is the largest provider of ETFs in the world. The company also has a leading position in the fast-growing segments of sustainable investing and digital wealth management. BlackRock has a trailing 12-month P/E ratio of 23.4, a forward P/E ratio of 20.6, a dividend yield of 1.9%, and a P/B ratio of 3.8.
- The Vanguard Group, Inc.: Vanguard is the second-largest asset manager in the world, with more than $8.3 trillion in AUM as of September 2023. The company is a pioneer and leader in the index fund industry, offering low-cost and diversified investment products for individual and institutional investors. The company also offers active funds, ETFs, retirement plans, advisory services, and more. The company is owned by its fund shareholders, which means it operates at cost and passes on the savings to its clients. Vanguard is a private company, so it does not disclose its financial performance or valuation metrics.
- State Street Corporation (STT): State Street is the third-largest asset manager in the world, with more than $3.9 trillion in AUM as of September 2023. The company is a global provider of financial services, including custody, administration, accounting, trading, research, and advisory services for institutional investors. The company also offers investment products, such as mutual funds, ETFs, index funds, alternative investments, and more. The company is known for its SPDR brand, which is the first and largest family of ETFs in the world. State Street has a trailing 12-month P/E ratio of 14.4, a forward P/E ratio of 11.7, a dividend yield of 2.8%, and a P/B ratio of 1.4.
Conclusion
TROW stock is a solid investment for income seekers, as it offers a high yield and consistent growth. The company has a proven track record of delivering strong financial results, even in challenging market conditions. The company also has several competitive advantages, such as its brand reputation and trust, its investment expertise and culture, and its diversified and global product portfolio.
