A true gem in a hammered industry
Shares of asset management companies have performed poorly recently. The rising popularity of low-cost ETFs impacted active fund managers harshly. When a whole sector gets out of favor, it is not uncommon that the baby is thrown out with the bathwater. I believe that this is what happened with T. Rowe Price (TROW), which is an outstanding company, yet its shares couldn't escape the rout.
Is the valuation attractive enough to take a closer look?
What first alerted me was the unusually high entry dividend yield. Going back to 1995, this stock provided a higher than 3.0% yield in only 5.9% of the time. When you consider that T. Rowe Price is a Dividend Champion with a 32-year dividend-raising streak, and the company typically increases the dividend in February, the story gets even more interesting.
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