April 29, 2025 a 11:31 am
TROW: Dividend Analysis - T. Rowe Price Group, Inc.
T. Rowe Price Group, Inc. exhibits a strong dividend profile with a current yield of 5.36%. Despite a moderate growth history, the company has maintained consistent dividend payments for over 40 years. This stability makes it an attractive choice for income-focused investors. However, the payout ratio suggests careful examination against earnings and cash flow sustainability.
📊 Overview
The overview of TROW's dividend metrics provides insight into its capacity to sustain shareholder returns.
| Metric | Value |
|---|---|
| Sector | Financials |
| Dividend yield | 5.36 % |
| Current dividend per share | 5.09 USD |
| Dividend history | 40 years |
| Last cut or suspension | None |
📈 Dividend History
TROW's dividend history showcases its commitment to returning value, marking its reliability as a long-term investment.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.27 |
| 2024 | 4.96 |
| 2023 | 4.88 |
| 2022 | 4.80 |
| 2021 | 7.32 |
📈 Dividend Growth
Assessing TROW's dividend growth is crucial to predicting long-term returns.
| Time | Growth |
|---|---|
| 3 years | -0.12 % |
| 5 years | 0.10 % |
The average dividend growth is 0.10 % over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
The payout ratio indicates the proportion of earnings paid as dividends, critical for understanding dividend security.
| Key figure | Ratio |
|---|---|
| EPS-based | 54.25 % |
| Free cash flow-based | 85.50 % |
The EPS payout ratio of 54.25% suggests that the company keeps a balanced approach, whereas the FCF-based ratio of 85.50% implies a higher reliance on free cash flow for dividends.
📊 Cashflow & Capital Efficiency
Analyzing cash flow and capital efficiency is crucial to understanding TROW's financial health and shareholder return potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 5.00 % | 3.78 % | 8.61 % |
| Earnings Yield | 8.32 % | 7.41 % | 6.32 % |
| CAPEX to Operating Cash Flow | 25.12 % | 25.26 % | 10.07 % |
| Stock-based Compensation to Revenue | 3.49 % | 4.11 % | 4.40 % |
| Free Cash Flow / Operating Cash Flow Ratio | 74.88 % | 74.74 % | 89.93 % |
The solid cash flow metrics highlight TROW's efficiency and ability to cover its dividend obligations while sustaining operations.
📊 Balance Sheet & Leverage Analysis
TROW's balance sheet and leverage indicators offer insight into its financial structure and risk.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.027 | 0.042 | 0.037 |
| Debt-to-Assets | 0.021 | 0.032 | 0.028 |
| Debt-to-Capital | 0.026 | 0.040 | 0.036 |
| Net Debt to EBITDA | -1.02 | -0.66 | -0.56 |
| Current Ratio | 8.01 | 5.88 | 5.53 |
| Quick Ratio | 8.01 | 5.88 | 5.53 |
| Financial Leverage | 1.30 | 1.29 | 1.32 |
TROW's low leverage and high liquidity ratios illustrate their strong financial backbone, enhancing their capacity to weather economic storms.
📊 Fundamental Strength & Profitability
Key profitability ratios provide a snapshot of TROW's financial performance efficiency.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 20.30 % | 18.82 % | 17.62 % |
| Return on Assets | 15.59 % | 14.57 % | 13.38 % |
| Margins: Net | 29.61 % | 27.69 % | 24.01 % |
| EBIT | 34.91 % | 31.55 % | 38.47 % |
| EBITDA | 32.89 % | 39.41 % | 39.06 % |
| Gross | 51.94 % | 49.63 % | 54.96 % |
| Research & Development to Revenue | 0 % | 0 % | 0 % |
Strong ROE and profitability margins emphasize TROW's lucrative business operations and strategic edge.
📉 Price Development
⭐ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 3 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 34/40
🗣️ Rating
T. Rowe Price Group, Inc. demonstrates a robust dividend policy with an impressively high stability and continuity score. While recent growth rates are moderate, the strong balance sheet and financial stability support a positive outlook. The ability to maintain dividends during different market cycles reinforces its credibility as a reliable dividend-paying stock, making it a strategic choice for conservative dividend investors seeking stable returns.