Besides strong growth, another thing that's bullish is
accelerating growth.T. Rowe Price Group (
) is seeing that in its earnings.
The money manager's profit growth accelerated from 6% in Q3 of
2013 to 20% in Q4 and 23% in the first quarter. The gain in Q1
marked its best performance in six quarters. Sales in the most
recent four quarters rose 15% to 18%.
Higher fees, market appreciation and client inflows have
lifted results in recent quarters. The company depends largely on
investment advisory fees, which are based on the amount of assets
under management. Last year, investment advisory fees made up 87%
of total revenue.
In the second through fourth quarters of 2013, T. Rowe noted
outflows from big institutional clients, but there was no mention
of that in the latest reported quarter. Assets under management
climbed to a record $711.4 billion in the first quarter from
$617.4 billion in the year-ago period.
T. Rowe's earnings are slated to rise 21% to $1.11 in the
second quarter. For all of 2014, analysts see profit growing 17%
to $4.56 a share. That growth would mark a third-straight year of
accelerating increases. Earnings per share rose 15% in 2012 and
16% in 2013.
Since going public in 1986, T. Rowe has raised its shareholder
dividend for 28 straight years. It is a member of the S&P 500
Dividend Aristocrats index. In February, T. Rowe bumped up its
dividend by 16% to the present quarterly rate of 44 cents a
share. Its dividend has jumped 83% since 2008.
On an annualized basis, the company pays $1.76 a share, which
works out to a yield of about 2%. Although that's one of the
lowest yields in the Finance-Investment Management industry
group, T. Rowe is one of the better-rated stocks by Composite
T. Rowe shares found support near the 50-day moving average
Monday. It is forming a base with resistance around 84.50.