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T. Rowe Group, Inc. (TROW) Message Board

  • wooglin_kai wooglin_kai Aug 20, 2012 9:19 AM Flag

    Conspiracy Theories Aside, Another Perspective!

    "T. Rowe Price (TROW) is a $16-billion asset manager. The company has nearly $542 billion in assets under management. Over the past five years, its EPS and dividends grew at average annual rates of 9.0% and 15%, respectively. Analysts forecast that the company's EPS will expand at an average rate of nearly 13% annually for the next five years. The company has posted a profit every quarter since going public in 1986. According to research firm Lipper, at the end of June 2012, 85% of T. Rowe Price's mutual funds beat the average return posted by competitors over the past five years.
    The asset manager has seen its deposits increase even as investors withdrew money from mutual funds in the last quarter. The relative outperformance of its funds and the appeal of retiree-oriented products helped boost its performance in the quarter. This trend is likely to continue, albeit global uncertainty will weigh on the stock and mutual fund performance. T. Rowe Price has a P/BV ratio of 4.3, which is 3 times higher than the ratio for the asset management industry but below the company's five-year average ratio. The company boasts a high ROE and ROIC of 22%.
    TROW pays a dividend yield of 2.2% on a payout ratio of 46%. The company's peers BlackRock (BLK), Legg Mason (LM), and AllianceBernstein Holding (AB) pay dividend yields of 3.4%, 1.7%, 6.9%, respectively. Based on the forward P/Es, the stock is trading at a premium relative to its peer group. However, the stock is priced below its own historical P/E average. The shares are changing hands at $62.70 a share, up 22.4% over the past 12 months. Among fund managers, the stock is popular with billionaires Ken Griffin and Ken Fisher."

65.20-0.72(-1.09%)Sep 26 4:00 PMEDT