T Rowe Price – Go Long and Stay Long. T. Rowe Price Group (TROW) is one my favorite publicly traded asset manager. Many are privately held including the two giants Fidelity and Vanguard. T Rowe Price has successfully navigated the trend where money for mutual funds was moving toward passive index managers. The firm has passive index funds but it is not one of the larger players in this market. However, T. Rowe Price has been successful in continuing to increase assets under management or AUM, which is about $1.62 trillion now. Much of the success for T. Rowe Price is due to excellent long-term fund performance providing an edge for this asset manager. Additionally, T. Rowe Price has no debt. Furthermore, the firm is a Dividend Aristocrat and Dividend Champion with 35 years of annual dividend growth. The stock is fairly valued in an overvalued market. I view T. Rowe Price as a long-term buy.
Overview of T Rowe Price – Go Long and Stay Long
T. Rowe Price traces its history back to 1937. Today, the firm is one of the largest asset managers in the U.S. and worldwide operating in 17 countries and has ~750 investment professionals. T. Rowe Price offers equity, fixed income, and multi-asset mutual funds. The firm is also known for its retirement accounts and specializes in target date retirement accounts. At the end of Q2 2021, AUM was about $1.62 million. Total revenue was about $6,207 million in 2020 and $7,085 million in the LTM.
T. Rowe Price Growth of AUM
For asset managers, scale is paramount. Much of the operating costs for an asset manager are fixed and variable costs are low. This means that greater AUM will allow costs to be spread out and increase profitability and so the goal is to increase AUM…
Disclosure: Long TROW
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.