Key Takeaways:
- T. Rowe’s dividend yield is the highest it’s been in over a decade with the stock trading at a 5-year low.
- The stock’s dividend payout ratio looks safe, backed by earnings and a 39-year dividend track record.
- Analysts expect low-single-digit dividend growth going forward.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
T. Rowe Price manages billions in assets, and today the stock trades at its 5-year low share price.
The company has a 39-year streak of dividend growth, so this could be a good time to get in on a reliable dividend stock while it looks cheap.
1: Dividend Yield
T. Rowe’s current dividend yield sits right at the top of its historical range, which usually signals a potential opportunity.
T. Rowe Price is primarily an active money manager, and the stock has struggled recently as investors have been shifting their funds from active money managers like T. Rowe to passive investing vehicles like ETFs.
However, $TROW’s management is looking to improve their fund performance in key equity strategies and lean into their more stable retirement and advisory business to continue to grow earnings.
The business has a strong balance sheet, and today offers a higher dividend yield than ever before.
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2: Dividend Safety
T Rowe. has a solid track record of keeping its payout in check.
Even when earnings-per-share dipped in 2023, EPS still well exceeded the company’s annual dividend payment.
Right now, the dividend looks safe because the business remains profitable and conservatively run. Analysts expect both EPS and dividends to grow slightly going forward.
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3: Dividend Growth Potential
T. Rowe Price has raised dividends for the past 39 consecutive years, and should be able to continue raising dividends for at least the next several years.
Dividend growth has slowed from the double-digit rates the stock was seeing back in 2022, but even still, analysts expect the company to raise dividends in the low-single-digits going forward.
Investors will have to watch how the company grows earnings-per-share going forward, but if the company can return to strong earnings growth, dividend growth can accelerate again.
Access up to 5 years of analyst forecasts for T. Rowe Price on TIKR >>>
TIKR Takeaway
T. Rowe Price is a solid dividend stock with a high current dividend yield trading at a multi-year low share price.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
