Attractive Valuation and Yield Make T. Rowe Price a Compelling Buy

T. Rowe Price’s diversified product offerings—including equity, fixed income, and multi-asset strategies—position it to capitalize on market volatility and long-term global growth trends. The high yield of 5.8% makes it easy to ride out any market downturns in the short term.

Additionally, the stock trades at just 9.6 times the company’s forward earnings forecast. This represents good value for such a strong yield and proven, diversified business model.

T. ROWE PRICE GROUP INC. (Nasdaq symbol TROW; www.troweprice.com) generally sees its fee income rise with the value of the mutual funds and other securities it manages. Thanks to the strong stock market, T. Rowe Price had $1.61 trillion in assets under management as of December 31, 2024, up 11.2% from a year earlier.

T. Rowe Price’s revenue in the fourth quarter of 2024, rose 11.1%, to $1.82 billion from $1.64 billion a year earlier. Despite higher costs—for payroll, advertising, and investments in new technology—earnings before unusual items increased 22.8%, to $484.8 million from $394.7 million. Due to fewer shares outstanding, earnings per share increased 23.3%, to $2.12 from $1.72.

Dividend Stocks: A solid balance sheet will help weather economic downturns

T. Rowe Price stands out as a global leader in active asset management with a long history of delivering consistent returns backed by proprietary research and a client-first culture. Its diversified product offerings—including equity, fixed income, and multi-asset strategies—position the firm to capitalize on market volatility and long-term growth trends such as retirement planning and artificial intelligence-driven investment tools.

With a strong balance sheet featuring $2.6 billion in cash and no long-term debt, T. Rowe Price is well-equipped to weather economic uncertainties while continuing to innovate and expand globally.

The company will probably earn $9.21 a share in 2025, and its shares trade at a low 9.6 times that forecast.

T. Rowe Price also raised your quarterly dividend by 2.4% with the March 2025 payment. The new annual rate of $5.08 a share yields a high 5.8%. The company has now increased its annual dividend for 39 consecutive years. T. Rowe Price’s TSI Dividend Sustainability Rating is Above Average.

Recommendation in Dividend Advisor: T. Rowe Price Group Inc. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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