On Mar 5, we issued an updated research report on T. Rowe Price Group TROW. The company’s robust organic growth and initiatives to expand business make us optimistic about its prospects.
Though rising expenses is a major concern, the company’s efforts to gain investors’ confidence through steady capital deployment activities are encouraging.
Shares of the company have gained 57.8% in a year’s time, outperforming 21.3% growth of the industry it belongs to.
Moreover, the Zacks Consensus Estimate for current-year earnings has been revised 15.1% upward over the last 60 days. As a result, it carries a Zacks Rank #2 (Buy).
T. Rowe Price remains committed to bolster its business through launching investment strategies and vehicles along with strengthening distribution channels in the United States, EMEA and Asia Pacific, improving technology platform and deriving long-term cost efficiencies.
Further, organic growth remains a key strength at T. Rowe Price, as reflected by its revenue growth. Net revenues saw a CAGR of 8.3% over the last five years (2013-2017). The company benefits from its diverse business model and its mix shift toward international growth funds is also expected to increase both revenue and investment management margins.
Moreover, the company’s debt free position and strong liquidity keep it well poised to undertake strategic investments and growth opportunities in the future. Also, it enables the company to enhance shareholders’ value through steady capital deployment activities. In February 2018, it hiked its quarterly common stock dividend by 23%.
However, consistently rising expenses owing to T. Rowe Price’s strategic efforts to attract investments from clients might affect its bottom-line growth. Also, overdependence on investment advisory fees (comprising about 90% of its net revenues) as a revenue source remains another major concern.
Other Stocks to Consider
Ameriprise Financial Services’ AMP Zacks Consensus Estimate for earnings for 2018 was revised 9.6% upward, in the last 60 days. Also, its share price has increased 17.5% in the past 12 months. The stock carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BlackRock BLK carries a Zacks Rank of 2. The stock’s current-year earnings estimates were revised 9.9% upward, in the last 60 days. Further, the company’s shares have gained 40.7% in a year’s time.
Federated Investors FII Zacks Consensus Estimate for earnings for 2018 have been revised 16.8% upward, over the last 60 days. In the past year, its shares have gained 28%. Also, it carries a Zacks Rank of 2.
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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
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