Investment manager T. Rowe Price (TROW) has quietly become a high-quality company based out of Baltimore, Maryland. While BlackRock (BLK) and other asset management firms have been building their businesses around the recent trend in passive management via exchange traded funds (ETFs), TROW has more than doubled their assets under management since the end of the financial crisis by providing very strong active investment management across a wide range of investment offerings, primarily mutual funds. Additionally, their average fee rate across their investments has held relatively steady while other managers have seen their rates plunge with the increased competition among passive funds. This analysis will show that the company is financially very sound and has returned a fair amount of capital back to shareholders. As my readers have seen in my other analyses, however, this does not necessarily translate into the right time to be jumping into the stock.
Over the past decade, TROW has increased revenues 9% annually. Not surprisingly, revenues bottomed out in 2009 at $1.9 billion, increasing each year to $4.2 billion in 2016. All good things must come to an end, though, as the annual growth rate in revenues has declined each year from 2014 through 2016.