T. Rowe Price Ramps Up Quarterly Dividend By 20%; Street Says Hold

T. Rowe Price raised its quarterly cash dividend by 20% to $1.08 per share. This marks the Baltimore-based investment manager’s 35th consecutive year of regular dividend increases since its inception.

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T. Rowe Price (TROW) announced that the new dividend will be paid on March 30, to shareholders of record as of March 16. Shares closed at $165.14 on Feb. 9, up nearly 1%.

The company’s annual dividend of $4.32 per share now reflects a dividend yield of 2.6%.

On Jan. 28, T. Rowe Price reported 4Q results. The company’s 4Q adjusted earnings climbed 42.4% year-over-year to $2.89 per share and outpaced Street estimates of $2.64. Revenues increased 18% to $1.73 billion and exceeded analysts’ expectations of $1.68 billion. As for 2021, the company expects non-GAAP operating expenses to increase 8-12%. (See T. Rowe Price stock analysis on TipRanks)

On Feb. 1, Citigroup analyst William Katz trimmed the stock’s price target from $159.50 to $153 (7.4% downside potential) and maintained a Hold rating. Despite the company’s “strong” 4Q earnings beat, the analyst was disappointed with the company’s reduced buyback program.

In line with Katz’s outlook, the Street’s consensus rating on the stock is a Hold. That’s based on 5 Holds, 3 Buys and 1 Sell. The average price target stands at $169.22 and implies upside potential of about 2.5% to current levels. Shares have gained about 23.2% over the past year.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in TROW is currently Neutral as 7 hedge funds trimmed their cumulative holdings of the stock by 6,500 shares in the last quarter.