That question was posed to me recently. T. Rowe Price shares will trade ex-dividend Monday, March 14. To qualify for a dividend check, investors must own the stock before its ex-dividend date, when the company finalizes its roster of shareholders to whom it will send dividend checks.
T. Rowe Price provides investment advisory services to individual and institutional investors in sponsored mutual funds and other managed investment portfolios.
Since Dec. 11 -- the last time we discussed the company's prospects and advised investors to run away after they collected the yield -- T. Rowe Price stock fell as much as 12%, hitting a new 52-week low of $63.57 in January. Since then, the risks have been reduced. And investors would do well to buy these shares now.
And this time it's OK to stick around longer.
Baltimore-based T. Rowe Price is scheduled to pay its 52-cent quarterly dividend on March 30 to shareholders of record as of March 16. Its current share price is around $71, down 0.7% year to date. The stock yields 3% annually, more than the dividend of the average company in the S&P 500 (SPX) index.
In its most recent quarter, the company beat analysts' estimates on both revenue and earnings, thanks to a 5% sequential rise in assets under management, which grew to $763 billion.
Despite the highly competitive mutual fund environment, T. Rowe Price operated its business debt-free. It has plenty of liquidity and cash to drive growth in the quarters and years ahead. At the same time, the company has spent nearly $1 billion in the last fiscal year to buy back its own stock, about 5% of its outstanding shares.
With its share price currently valued at just 14 times fiscal 2017 estimates of $4.95 per share, investors would do well holding T. Rowe Price stock for the long term. The company shows it sees its stock as cheap, as evidenced by the massive buyback. And its strong 3% annual dividend yield is an added bonus.