T. Rowe Price Group, Inc.’s (TROW - Free Report) board of directors recently approved a 23% hike in the company’s quarterly common stock dividend. The revised quarterly dividend now comes in at 70 cents per share compared with the previous figure of 57 cents. The dividend will be paid on Mar 29 to shareholders of record as of Mar 15, 2018.
This marks the 32nd consecutive annual dividend raise for this investment manager, reflecting its commitment to return value to shareholders with the solid cash-generation capabilities. Prior to this hike, the company had increased its dividend by 5.6% (from 54 cents to 57 cents per share) in February 2017.
We believe despite active competition, the company has a significant long-term upside potential based on its disciplined risk-aware investment approach, which focuses on diversification, style consistency and fundamental research.
As of Dec 31, 2017, T. Rowe Price remains debt free with substantial liquidity, including cash and sponsored portfolio-investment holdings of about $4.1 billion, which supports its ability to continue investing in the future. Moreover, the company has $991.1 billion in assets under management as of Dec 31, 2017.
Further, during 2017, T. Rowe Price repurchased 6.6 million shares of its common stock for $458.1 million, and invested $186.1 million in capitalized technology and facilities using available cash balances.
Recently, T. Rowe Price announced preliminary assets under management (AUM) of $1.05 trillion for January 2018, crossing $1 trillion in assets. Results reflect 5.7% rise from $991 billion as of Dec 31, 2017. Client transfers from mutual funds to other portfolios of $3.7 billion were recorded in January 2018.
Considering last day’s closing price of $105.73 per share, the dividend yield is currently valued at 2.65%.
Investors interested in this Zacks Rank #2 (Buy) stock can have a look at this asset manager’s fundamentals and growth opportunities.
Revenue Growth: T. Rowe Price’s net revenues indicate compounded annual growth rate (CAGR) of 8.3% over the last five years (2013-2017). The company’s projected sales growth (F1/F0) of 10.3% (as against 6.9% industry average) highlights constant upward momentum in revenues.
Earnings Strength: T. Rowe Price has recorded earnings growth rate of 7.5% over the last three to five years. Retaining the earnings momentum, the earnings growth rate is anticipated to be around 33% for the current year and 5.4% for 2019. Further, the company recorded an average positive earnings surprise of 6.28% over the trailing four quarters.
Leverage: T. Rowe Price’s debt/equity ratio is nil compared with the industry average of 0.11.
Superior Return on Equity (ROE): T. Rowe Price’s ROE of 25.3%, as compared with the industry average of 13.5%, highlights the company’s commendable position over its peers.
Share Price Movement: T. Rowe Price’s shares have gained 26.1% over the last six months compared with 8.9% growth in the industry.
Stocks to Consider
Shares of Apollo Global Management, LLC (APO - Free Report) , which sports a Zacks Rank #1 (Strong Buy), gained more than 12% over the past six months. The Zacks Consensus Estimate for the stock climbed nearly 3% to $3.10, over the last 30 days, for 2018. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Ameriprise Financial, Inc. (AMP - Free Report) rallied more than 7% in six months’ time. The Zacks Consensus Estimate for the stock climbed 5.6% to $14.43, over the last 30 days, for 2018. It carries a Zacks Rank #2.
Shares of Lazard Ltd. (LAZ - Free Report) have appreciated more than 22% in the last six months. The Zacks Consensus Estimate for the stock climbed 3.1% to $3.99, in a month’s time, for 2018. The stock holds a Zacks Rank #2.
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