Wednesday, September 12, 2012

T Rowe Price (TROW) 2012 Review

T. Rowe Price Group Inc, TROW, provides investment advisory and administrative services to an assortment of no load funds, sponsored investment products and private accounts.

T Rowe Price has generated a 18-20%+ return on equity and a 10-15% growth rate in earnings and dividends over the 10 years. 

While TROW suffered a decline in assets under management due primarily to the late 2008-early 2009 decline in stock prices, a recovery occurred in 2010 and should continue as a result of:

(1) the excellent track record of its funds as well as recent investor optimism has increased the value of current assets under management as well as attracting new customers,

(2) the introduction of new products such as country funds,

(3) an aggressive cost cutting program.


(1) any decline in stock prices will impact assets under management,

(2) increasing volatile markets,

(3) more government regulation,

(4) a highly competitive industry.

TROW is rated A+ by Value Line, has no debt and its stock yields 2.3%.

Statistical Summary

Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2002
TROW 2.3% 10% 40% 9
IND 2.0 9 26 NA

Debt/Equity ROE EPS Down Since 2002 Net Margin Value Line Rating
TROW 0% 23% 2 29% A+
IND 31 21 NA 17 NA


Note: TROW stock made good initial progress off its March 2009 low, quickly surpassing the down trend off its September 2008 high (red line) and the November 2008 trading high (green line). TROW is in a long term up trend; the straight blue line is the lower boundary. Intermediate term it is in a trading range (purple lines). The wiggly blue line is on balance volume. The Dividend Growth and High Yield Portfolios own 75% positions in TROW. The upper boundary of its Buy Value Range $39. The lower boundary of its Sell Half Range is $103.

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.