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T.Rowe Price Declares 5.6% Dividend Hike for Shareholders

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T. Rowe Price Group, Inc. 's TROW board of directors approved a 5.6% hike in the company's quarterly common stock dividend. The revised quarterly dividend now comes in at 57 cents per share compared with the previous figure of 54 cents. The dividend will be paid on Mar 30, 2017, to shareholders of record as of Mar 16.

This marks the 31st consecutive annual dividend raise for this investment manager, reflecting its commitment to return value to shareholders with its solid cash generation capabilities. Prior to this hike, the company had increased its dividend by 4% (from 52 cents to 54 cents per share) in Feb 2016.

We believe that despite active competition, the company has a significant long-term upside potential based on its disciplined risk-aware investment approach, which focuses on diversification, style consistency and fundamental research.

As of Dec 31, 2016, T. Rowe Price remains debt free with substantial liquidity, including cash and sponsored portfolio investment holdings of about $1.9 billion, which supports its ability to continue investing in the future. Moreover, the company has $810.8 billion in assets under management as of Dec 31, 2016.

Further, during 2016, T. Rowe Price repurchased 10 million shares of its common stock for $676.9 million, and invested $148.3 million in capitalized technology and facilities using available cash balances.

Considering last day's closing price of $71.32 per share, the dividend yield is currently valued at 3.2%.

Investors interested in this Zacks Rank #3 (Hold) stock can have a look at this asset manager's fundamentals and growth prospects.

Revenue Growth : T. Rowe Price's net revenues indicates compounded annual growth rate ("CAGR") of 8.7% over the last five years (2012-2016). The company's projected sales growth (F1/F0) of 5.6% (as against 2.9% industry average) highlights constant upward momentum in revenues.

Stock is Undervalued : T. Rowe Price has a P/E ratio of 14.99x, compared to the S&P 500 average of 18.42x. Based on this ratio, the stock seems undervalued.

Leverage : T. Rowe Price's debt/equity ratio is nil compared with the industry average of 0.14.

Superior Return on Equity (ROE) : T. Rowe Price's ROE of 21.8%, as compared with the industry average of 13.6%, highlights the company's commendable position over its peers.

Share Price Movement : T. Rowe Price's shares have gained 3.1% over the last one-year period, compared with 26.0% growth in the Zacks categorized Investment Management industry.

Stocks to Consider

Shares of Apollo Global Management, LLC APO , which sports a Zacks Rank #1 (Strong Buy), gained over 20% over the past six months. The Zacks Consensus Estimate for the stock climbed 9.8% to $2.25, over the last 30 days, for 2017. You can see the complete list of today's Zacks #1 Rank stocks here .

Shares of Ameriprise Financial, Inc. AMP gained over 32% over the past six months. The Zacks Consensus Estimate for the stock climbed 2.3% to $10.63, over the last 30 days, for 2017. It carries a Zacks Rank #2 (Buy).

Shares of Lazard Ltd. LAZ gained over 19% over the past six months. The Zacks Consensus Estimate for the stock climbed 1.9% to $3.14, over the last 30 days, for 2017. It carries a Zacks Rank #2.

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T. Rowe Price Group, Inc. (TROW): Free Stock Analysis Report

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Apollo Global Management, LLC (APO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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