As my readers know, T. Rowe Price Group Inc (TROW) is one of my favorite asset managers. The company has successfully navigated investors' changes in preference from active investing to passive investing over the past decade. Impressively T. Rowe Price has done this without being a major player in passive or index funds. Unlike some of the company’s competitors, T. Rowe Price is still able to generate positive inflows and rising assets under management [AUM]. With that said, the stock is trading at near a 52-week and all-time high. But still the valuation based on earnings multiple is relatively low. The company also has other desirable characteristics and it’s a Dividend Aristocrat. In this article I outline four factors of why T. Rowe Price still has room to run.

T. Rowe Price is one of the few active asset managers that continues to organically grow AUM. This is important as growing AUM leads to higher profitability. This year ended up being a solid one after a difficult 2018, when market declines punished most asset managers. Assets under management fell in 2018 due to stock market declines that led to net outflows as many mutual funds had relatively poor years. T. Rowe Price was no exception as investors tend to pull money out of funds when they do poorly. The company ended 2018 with approximately $962B of AUM down from the end of 2017 when the company had roughly $991B of AUM.

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