Yahoo Finance 5 Reasons to Invest in T. Rowe Price (TROW) Stock Right Now
T. Rowe Price Group, Inc. TROW is a wise investment option, driven by its solid asset under management (AUM) balance, enhancing product offerings and expansion in global markets. Its decent liquidity position helps sustain steady capital deployments.
The Zacks Consensus Estimate for T. Rowe Price's 2024 and 2025 earnings has been revised to 13.5% and 10.3% upward in the past 90 days, respectively. This shows that analysts are optimistic regarding the company’s earnings growth prospects. TROW currently flaunts a Zacks Rank #1 (Strong Buy).
In the past six months, the company’s shares have gained 19.5% compared with the industry's upside of 12.7%.
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Mentioned below are a few factors that make TROW a must-buy stock now:
Revenue Strength: Organic growth remains a key strength at T. Rowe Price, as reflected by its revenue growth story. Net revenues registered a four-year (ended 2023) compound annual growth rate (CAGR) of 3.6%, with the rising trend continuing in first-quarter 2024.
In September 2023, it launched T. Rowe Price OHA Select Private Credit Fund (OCREDIT) in partnership with OHA to provide a private credit investment solution for income-oriented individual investors. The mix shift toward international growth funds is also expected to help increase revenues and the investment management margin.
AUM Growth: T. Rowe Price’s diverse business model ensures sustainable earnings. Accordingly, the company’s diversified AUM across various asset classes, client bases and geographies offers support. Its AUM balance witnessed a CAGR of 4.6% in the past four years (2019-2023), with the rising trend continuing in first-quarter 2024.
Strong Liquidity Position: T. Rowe Price exhibits a strong liquidity position. It had liquid assets (including cash and cash equivalents as well as investments) of $5 billion compared with total liabilities of $2.18 billion as of Mar 31, 2024. A higher level of liquid assets in the company aids in impressive capital distribution activities. It has hiked quarterly dividends every year since its IPO in 1986, the most recent being a sequential hike of 1.6% in January 2024 to $1.24 per share.
Superior Return on Equity (ROE): TROW’s ROE is 19.70% compared with the industry average of 13.32%. This shows that the company reinvests its cash more efficiently than its peers.
Strong Leverage: T. Rowe Price’s debt/equity ratio is 0.00 compared with the industry average of 0.03, displaying no debt burden relative to the industry. It highlights the financial stability of the company, even in an unstable economic environment.
Other Asset Managers Worth a Look
A couple of better-ranked stocks from the finance space are Janus Henderson Group JHG and Artisan Partners Asset Management Inc. APAM.
Earnings estimates for Janus Henderson Group have been revised 10.4% upward for the current year in the past 60 days. The stock has increased 18.7% in the past six months. JHG currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Artisan Partners carries a Zacks Rank #2 (Buy). Its earnings estimates have been revised upward by 4.3% for the current year in the past 90 days. In the last six months, APAM’s shares increased 12.9%.
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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
Artisan Partners Asset Management Inc. (APAM) : Free Stock Analysis Report
Janus Henderson Group plc (JHG) : Free Stock Analysis Report
