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T. Rowe Price Group Stock Buy Recommendation Reiterated (TROW)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- T. Rowe Price Group (Nasdaq:TROW) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:

  • TROW's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues rose by 11.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Capital Markets industry and the overall market, PRICE (T. ROWE) GROUP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • 48.30% is the gross profit margin for PRICE (T. ROWE) GROUP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.65% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 72.83% to $459.40 million when compared to the same quarter last year. In addition, PRICE (T. ROWE) GROUP has also vastly surpassed the industry average cash flow growth rate of -121.89%.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

T. Rowe Price Group, Inc. is a publicly owned asset management holding company. The firm primarily provides its services to individual and institutional investors, retirement plans, and financial intermediaries. T. Rowe Price Group has a market cap of $18.6 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 20.00, above the S&P 500 P/E ratio of 18.00. Shares are up 10.1% year to date as of the close of trading on Thursday.

You can view the full T. Rowe Price Group Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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