T. Rowe Price Group Inc
🇺🇸 TROW · NYSE/NASDAQ · US74144T1088
Bank
USD 90.17 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
9.7
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 90.17 ÷ 9.33 = 9.7
TTM period through: 2025-12-31
Forward P/E (estimated): 9.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 9.8
Yield (Fwd)
5.77%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 5.65%
Net Debt/EBITDA (TTM)
-0.9x
Latest quarter: -3.7x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): -3.7x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
55.8%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 54.8%
Cash Flow Payout (TTM): 65.2%
FCF Coverage (TTM): 1.29x
ROE
18.8%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
5.4x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
T. Rowe Price is a highly profitable asset management firm featuring a pristine balance sheet and virtually zero debt. However, structural headwinds in the active management industry and cyclical earnings make it unsuitable for conservative dividend strategies seeking predictable cash flows. Not recommended for new positions given the historical dividend instability and secular pressures, despite the attractive 5.6% yield and low P/E valuation.
Sector Context
T. Rowe Price Group is a premier global asset management firm that generates revenue primarily through investment advisory fees based on assets under management (AUM). While categorized in the broader banking or financial sector, it is fundamentally an asset manager, meaning its revenues are highly cyclical and directly tied to global stock market performance rather than the stable, predictable cash flows typically sought in conservative dividend strategies.
📊 Strategy Analysis
- • Fortress balance sheet with virtually zero debt, evidenced by a Debt/Equity ratio of 0.08 and negative Net Debt/EBITDA of -0.87x.
- • Highly attractive valuation trading at a P/E of 9.67, well within the optimal 8-15x range.
- • Strong profitability metrics with an ROE of 18.8% and sustainable current dividend coverage (53% TTM payout ratio).
⚠ What to Watch
- • Structural, secular headwinds in the active asset management industry (fee compression and the shift to passive investing) are reflected in a negative 5-year EPS CAGR of -7.1%.
- • Highly cyclical revenue model directly exposed to global equity market performance, lacking the predictable, recession-resistant cash flows required for a 'forever' dividend holding.
- • History of dividend instability, highlighted by a substantial 34.4% dividend cut in 2022 driven by fundamental business deterioration.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.