We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
T. Rowe Price (TROW) Hikes Dividend by 11.1%: Worth a Look?
Read MoreHide Full Article
T. Rowe Price Group, Inc.’s (TROW - Free Report) board of directors recently approved an 11.1% sequential hike in its quarterly common stock dividend. The revised quarterly dividend now totals $1.20 per share compared with the previous figure of $1.08. The amount will be paid out on Mar 30 to its shareholders of record as of Mar 15, 2022.
This marks this investment manager’s 36th consecutive annual dividend raise, reflecting its commitment to return value to its shareholders with solid cash-generation capabilities. Prior to this hike, T. Rowe Price had increased its dividend 20% (from 90 cents to $1.08 per share) last February.
Considering last day’s closing price of $151.28 per share, the dividend yield is currently 3.2%. The yield is not only attractive to income investors but also represents a steady income stream.
As of Dec 31, 2021, T. Rowe Price remained debt free with substantial liquidity, including cash and cash equivalents of $1.52 billion, supporting its ability to continue investing in the future. For 2022, TROW projects capital expenditures of approximately $295 million, comprising three-fourth for technology development.
Substantial liquidity paves the way for impressive capital-deployment activities. During the third quarter of 2021, the firm paid out a special cash dividend of $3 per share. In February 2020, its board of directors increased the common share repurchase authorization by 10 million shares, bringing the total authorization to 22.4 million shares.
During the fourth quarter 2021, 3.1 million shares were bought back by the firm. This reflects T. Rowe Price’s commitment to return value to its shareholders with its strong cash generation capabilities. Therefore, with a debt-free position, the capital deployment activities seem sustainable for the long term.
Investors can have a look at this asset manager’s fundamentals and growth opportunities before making any investment decision.
T. Rowe Price’s net revenues saw a compounded annual growth rate (CAGR) of 12.4% over the last six years (2016-2021). Additionally, TROW is focused on fortifying business through several planned initiatives, improving its technology platform and deriving long-term cost efficiencies.
TROW’s ability to sustain the hiked dividend also depends on earnings growth. Its past performance depicts a robust earnings picture. T. Rowe Price recorded an earnings growth rate of 22% over the last three to five years compared with the 6.7% rise witnessed by the industry it belongs to. Its expected long-term earnings per share growth (next five years) is 5.9%. If this momentum continues in the upcoming period, such dividend payments will be sustainable going forward.
T. Rowe Price’s return on equity of 36.1% compared with the industry average of 17.08% highlights its better efforts in managing its shareholders’ capital than its peers.
However, rising operating costs might likely hinder bottom-line growth. Also, overdependence on investment advisory fees and U.S. equity assets are concerning. Thus, investors must consider these factors before making any decision.
T. Rowe Price’s shares have lost 30.4% over the past six months, wider than the 8.4% fall registered by the industry.
Over the past few months, several companies have rewarded their shareholders with dividend hikes. Some of these are Midland States Bancorp, Inc. (MSBI - Free Report) , HomeStreet, Inc.’s (HMST - Free Report) and Fidelity National Information Services Inc. (FIS - Free Report) .
MSBI declared a quarterly cash dividend of 29 cents per share, up 3.6% from the prior payout. The dividend will be paid out on Feb 18 to all its shareholders of record on Feb 11.
This increase represents the 22nd consecutive annual hike in Midland States’ quarterly cash dividend. Prior to this, MSBI had announced a 4.5% rise to 28 cents per share in November 2021.
HMST declared a quarterly dividend of 35 cent per share, representing a hike of 40% from the prior payout. The dividend will be paid out on Feb 23 to its shareholders of record as of Feb 9.
This marks the third dividend hike by HomeStreet. HMST had earlier hiked its dividend by 66.7% to 25 cents per share in February 2021.
Consistent with its updated capital allocation strategy announced in November 2021, Fidelity hiked its quarterly common stock dividend by 21% from the prior-quarter payout to 47 cents per share in January this year. The new dividend will be paid out on Mar 29 to its shareholders of record as of Mar 25, 2022.
Since March 2012, Fidelity National has raised its dividend eight times. Its dividend was last hiked in February 2021 by 11% to 39 cents per share. This reflects FIS’s commitment to return its shareholders’ funds with strong cash-generation capabilities.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
T. Rowe Price (TROW) Hikes Dividend by 11.1%: Worth a Look?
T. Rowe Price Group, Inc.’s (TROW - Free Report) board of directors recently approved an 11.1% sequential hike in its quarterly common stock dividend. The revised quarterly dividend now totals $1.20 per share compared with the previous figure of $1.08. The amount will be paid out on Mar 30 to its shareholders of record as of Mar 15, 2022.
This marks this investment manager’s 36th consecutive annual dividend raise, reflecting its commitment to return value to its shareholders with solid cash-generation capabilities. Prior to this hike, T. Rowe Price had increased its dividend 20% (from 90 cents to $1.08 per share) last February.
Considering last day’s closing price of $151.28 per share, the dividend yield is currently 3.2%. The yield is not only attractive to income investors but also represents a steady income stream.
As of Dec 31, 2021, T. Rowe Price remained debt free with substantial liquidity, including cash and cash equivalents of $1.52 billion, supporting its ability to continue investing in the future. For 2022, TROW projects capital expenditures of approximately $295 million, comprising three-fourth for technology development.
Substantial liquidity paves the way for impressive capital-deployment activities. During the third quarter of 2021, the firm paid out a special cash dividend of $3 per share. In February 2020, its board of directors increased the common share repurchase authorization by 10 million shares, bringing the total authorization to 22.4 million shares.
During the fourth quarter 2021, 3.1 million shares were bought back by the firm. This reflects T. Rowe Price’s commitment to return value to its shareholders with its strong cash generation capabilities. Therefore, with a debt-free position, the capital deployment activities seem sustainable for the long term.
Investors can have a look at this asset manager’s fundamentals and growth opportunities before making any investment decision.
T. Rowe Price’s net revenues saw a compounded annual growth rate (CAGR) of 12.4% over the last six years (2016-2021). Additionally, TROW is focused on fortifying business through several planned initiatives, improving its technology platform and deriving long-term cost efficiencies.
TROW’s ability to sustain the hiked dividend also depends on earnings growth. Its past performance depicts a robust earnings picture. T. Rowe Price recorded an earnings growth rate of 22% over the last three to five years compared with the 6.7% rise witnessed by the industry it belongs to. Its expected long-term earnings per share growth (next five years) is 5.9%. If this momentum continues in the upcoming period, such dividend payments will be sustainable going forward.
T. Rowe Price’s return on equity of 36.1% compared with the industry average of 17.08% highlights its better efforts in managing its shareholders’ capital than its peers.
However, rising operating costs might likely hinder bottom-line growth. Also, overdependence on investment advisory fees and U.S. equity assets are concerning. Thus, investors must consider these factors before making any decision.
T. Rowe Price’s shares have lost 30.4% over the past six months, wider than the 8.4% fall registered by the industry.
Currently, MTB carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Companies Undertaking Similar Action
Over the past few months, several companies have rewarded their shareholders with dividend hikes. Some of these are Midland States Bancorp, Inc. (MSBI - Free Report) , HomeStreet, Inc.’s (HMST - Free Report) and Fidelity National Information Services Inc. (FIS - Free Report) .
MSBI declared a quarterly cash dividend of 29 cents per share, up 3.6% from the prior payout. The dividend will be paid out on Feb 18 to all its shareholders of record on Feb 11.
This increase represents the 22nd consecutive annual hike in Midland States’ quarterly cash dividend. Prior to this, MSBI had announced a 4.5% rise to 28 cents per share in November 2021.
HMST declared a quarterly dividend of 35 cent per share, representing a hike of 40% from the prior payout. The dividend will be paid out on Feb 23 to its shareholders of record as of Feb 9.
This marks the third dividend hike by HomeStreet. HMST had earlier hiked its dividend by 66.7% to 25 cents per share in February 2021.
Consistent with its updated capital allocation strategy announced in November 2021, Fidelity hiked its quarterly common stock dividend by 21% from the prior-quarter payout to 47 cents per share in January this year. The new dividend will be paid out on Mar 29 to its shareholders of record as of Mar 25, 2022.
Since March 2012, Fidelity National has raised its dividend eight times. Its dividend was last hiked in February 2021 by 11% to 39 cents per share. This reflects FIS’s commitment to return its shareholders’ funds with strong cash-generation capabilities.