This an era of asset management firms doing well and T Rowe Price (NASDAQ: TROW) is one of the best.
While other financial entities such as Goldman Sachs (NYSE: GS) and JPMorgan (NYSE: JPM) are better known, few treat their shareholders as well. Along with the rest of the financial sector, T Rowe Price has stormed back from The Great Recession. As such, T Rowe Price is appealing for growth, value, and income investors.
This has certainly been shown by the stock in recent market action (chart below).
T Rowe Price is up for the last six months and year of trading. Its margins are robust. The returns are very healthy, too. The return-on-assets is over 20 percent, which is very alluring for an asset management firm. There is no debt on the balance sheet, which is always a major plus for any publicly traded company. That balance sheet and the income statement produce a profit margin of over 30 percent, which makes everything else even more tempting.
The dividend is also very appealing.
At present, the average dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY) is around 1.8 percent. The dividend yield for T Rowe Price is just over 2.2 percent. The company has a history of raising the amount of the dividend, too. As a result, those owning the stock get a raise every year just for not selling.
Wall Street is very bullish about the future of T Rowe Price.
Now trading around $80 a share, the mean analyst target price for T Rowe Price over the next year of market action is $92.94. It has a high beta of 1.31, which means the share price moves nearly one-third more than the market as a whole. That offers long term investors the opportunity to buy at a discount and hold for rewarding total returns into the future.