T. Rowe Price Group

T. Rowe Price Group, Inc. (TROW - Analyst Report) continues to outperform the market on strong fundamentals that include a return on equity (ROE) of 12.7% and a net profit margin of 17.5%.

Company Description

T. Rowe Price Group, Inc. is a global investment management organization that provides a broad array of mutual funds, subadvisory services and separate account management for individual and institutional investors, retirement plans and financial intermediaries.

The company offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research.

Recent Upgrades

T. Rowe Price has been the subject of brokerage upgrades, most recently from Stifel Nicolaus. Previously, the asset manager saw upgrades from Deutsche Bank and A Jefferies & Co.

Strong Momentum and Solid Quarterly Results

Shares of TROW continue to outperform market, more than doubling the S&P 500 over the past year. The stock spiked on a strong third quarter and has maintained a higher level since then.

Third-quarter earnings per share of 50 cents were below last year’s 56 cents but topped the Zacks Consensus Estimate by 9%.

The company also reported a 16% increase in assets under management, totaling $366.2 billion.

Management noted that firm's investment advisory results relative to peers remain strong, with 87% of the T. Rowe Price funds across their share classes surpassing their comparable Lipper averages on a total return basis for the 5-year period ended September 30, 2009, 83% outperforming for the 3-year period and at least 79% outperforming for the 1- and 10-year periods.

The company also stated that it remains debt-free with substantial liquidity, including cash and mutual fund investment holdings of $1.4 billion that supports TROW’s ability to continue investing for the future.

Bullish Forecasts

Analysts polled by Zacks have been hiking earnings estimates. The current full-year projection of $1.63 per share is up from $1.48 over the past 90 days. For 2010, the Zacks Consensus Estimate of $2.40 per share climbed from $2.06 over the past 60 days.

Stellar Fundamentals

In addition to having a balance sheet that shows no debt, TROW offers a solid return on equity (ROE) of 12.7%, which soars past the industry average of 5%. The company’s net profit margin of 17.5% soars past the industry average of 1.4%. This Growth and Income pick also pays an industry-leading dividend yield of 2%.

Alex Kolb is the Growth & Income Stock Strategist for Zacks.com. He also writes the popular daily commentary column for the ZacksElite.com service.

Read the full analyst report on TROW