T. Rowe Price Group, Inc. (TROW) is one of these stocks that kind of hides in the background. Many investors know about the company but are not sure if they should invest. But a long-term investment in T. Rowe Price has provided solid returns. In the trailing 20 years, T. Rowe Price’s returns crushed that of the S&P 500 with and without dividends reinvested. A $10k investment 20 years ago would be almost $130k today. The difference is less pronounced over the past 10 years, but investors still came close to matching the broader market.
T. Rowe Price is a Dividend Aristocrat having raised the annual dividend for 33 straight years. The company is also well-known as one that carries no debt. Seemingly, T. Rowe Price has even successfully navigated the secular shift from active to passive investing that has hurt many active fund asset managers but benefited BlackRock, Inc. (BLK) and privately-held Vanguard. There are a few negatives for the stock including a high beta and sensitivity of the top and bottom lines to market volatility. But in my opinion, the positives outweigh the negatives. Furthermore, the company performed very well in my recent ranking model (coming in second) of the Dividend Champions due to high dividend growth rates, 5-year trailing EPS growth rate, low payout ratio, and low debt-to-equity ratio. Hence, I view T. Rowe Price as a long-term buy.