I’ve always been content with the opposite: companies that keep their heads down, cash their checks, and quietly make shareholders richer over time.

That’s why T. Rowe Price (Nasdaq: TROW) is on my radar this week. It’s the kind of business that rarely lands on the front page, but its work helps people sleep well at night.

T. Rowe Price is a global asset manager with $1.8 trillion in assets under management (AUM). About two-thirds of those assets are tied to retirement investors – one of the most durable customer bases on Earth.

The company makes money the old-fashioned way: It manages other people’s money and collects fees. It focuses heavily on long-term investing, research-driven portfolio management, and a culture that, frankly, is more buttoned-up than most of Wall Street.

That’s not exciting. But if you’re managing retirement accounts, excitement is overrated.

Stability is the point.

In the third quarter, net revenues rose 6% year over year to $1.9 billion, while diluted earnings per share hit $2.87, up 8.7% from a year ago. AUM gained $89 billion of market appreciation despite $7.9 billion in net outflows.

Management emphasized improving investment performance, particularly across fixed income and long-term equity mandates, and highlighted its new strategic collaboration with Goldman Sachs to expand model portfolios, alternatives access, and advisor-managed accounts.

There were also significant cost moves, as expense discipline remains a priority. The company reduced headcount by roughly 4% since year-end and recorded a $28.5 million restructuring charge tied to layoffs.

It also returned $442 million to shareholders last quarter through dividends and buybacks.

With all that said, let’s now run this sure and steady asset manager through The Value Meter.

T. Rowe’s EV/NAV ratio is 1.75, far below the peer average of 3.80. That means investors are paying less than half of what they typically would for every dollar of net assets.

This is a clear sign of undervaluation compared with the broader universe.

Free cash flow efficiency paints an even better picture. The firm’s FCF/NAV ratio is 2.48%, more than double the peer average of 1.13%.

The company also grew its free cash flow 45.50% of the time across the last 12 quarters – roughly in line with the peer average of 46.76%. Given the nature of the business, this isn’t a bad thing. Rather, it shows the company’s cash growth profile is solid rather than spectacular.

Still, consistency counts. And T. Rowe delivers plenty of it.

Over the past year, its stock has traded in wide swings – from highs near $118 to lows in the high $70s before rebounding to around $98 today. The chart shows a stock that’s been pushed around by sentiment far more than by fundamentals.

That usually spells opportunity.

T. Rowe Price is not a high-octane growth engine, nor does it pretend to be. It’s a resilient, cash-generating machine with a loyal client base, improving investment performance, and a growing lineup of advisory and retirement solutions.

Add in a nice 5% dividend yield, a disciplined expense strategy, and undervalued fundamentals, and you start to see why patient investors might want to take notice.

It’s no wonder the company is buying back its own stock.

The Value Meter rates T. Rowe Price as “Slightly Undervalued.”

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.

The post T. Rowe Price: Quiet, Consistent, and Minting Money appeared first on Wealthy Retirement.

Two investors look at the same jagged line and see two entirely different stories – fear for one, quiet opportunity for the other. Western Union‘s (NYSE: WU) chart is one of those Rorschach tests.

The stock crested near $12 in early 2024, faded through the rest of the year, and spent most of 2025 trying to decide whether it still belongs in a faster-moving world.

Yet beneath that messy picture is a company changing in ways the market hasn’t fully caught on to. That tension – the reputation of a fading legacy player versus the reality of a business adapting more quickly than it gets credit for – is what pulled me into Western Union this week.

Western Union is still best known for its global remittance network, the financial lifeline for millions of families spread across borders. But the company is steadily reshaping itself.

Management’s “Evolve 2025” strategy leans on something simple but smart: using the company’s enormous retail footprint to funnel customers into better digital experiences while building new services that make Western Union more than a one-trick money transfer company.

It’s slow, steady modernization rather than a flashy reinvention.

The numbers from the third quarter show both the friction and the progress. Revenue landed at just over $1 billion, basically flat from last year. Adjusted revenue dipped slightly, and North America retail continues to slide as customers shift to mobile and low-fee competitors.

But that’s only half the story.

The Consumer Services segment, which includes wallets, bill pay, and travel money, exploded 49% year over year. Digital transactions climbed 12%, marking the eighth straight quarter of healthy growth. Both GAAP and adjusted operating margins improved to 20%, a sign that the company is becoming more efficient even as it invests in its shift toward digital.

Cash generation remains the anchor. Year to date, Western Union has produced more than $400 million in operating cash flow and returned over $430 million to shareholders through buybacks and dividends.

This isn’t a company gasping for air. It’s a company trimming fat and redirecting energy.

The Value Meter focuses on what a business actually produces, not the story told around it. And the cash numbers here speak loudly.

Western Union’s enterprise value-to-net asset value ratio is 4.95, a small premium to the broad universe’s 3.80. That’s not ideal, but the next metric wipes away most of the concern: Free cash flow-to-NAV sits at 13.21%, compared with the universe’s 1.13%.

That’s not just “better.” It’s in a different league. Western Union generates cash almost 12 times more efficiently than the typical company.

Its 12-quarter free cash flow consistency also edges out the universe average, showing a pattern of steady improvement rather than erratic spurts.

Meanwhile, the stock looks like it’s been sentenced to the penalty box. It’s the kind of chart you see when investors doubt a company’s long-term relevance. But doubt isn’t the same as decline, and the fundamentals don’t match the pessimism baked into the price.

Western Union isn’t morphing into a high-growth fintech, and it doesn’t need to. It just needs to keep expanding its higher-margin services and nudge more of its customer base toward digital.

If it does that – and the past year suggests it’s already doing it – the market’s expectations look too low.

The Value Meter rates Western Union as “Slightly Undervalued.”

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.

The post The Market’s Missing Something Big With This Bank’s Stock appeared first on Wealthy Retirement.

My friend’s brother is no longer running New Mountain Finance, but the company still pays a high 12% dividend yield. Let’s see whether that dividend is as solid as my friend’s table tennis skills.

New Mountain Finance primarily lends money to companies with EBITDA (earnings before interest, taxes, depreciation, and amortization) between $10 million and $200 million, and its portfolio spans a wide variety of industries.

Healthcare services is the largest portion at 11%, while enterprise resource planning software makes up 8% and education and consumer services each account for 7%.

Since the company is a BDC, we look at net investment income, or NII, as our measure of cash flow to determine the health of the dividend.

Last year, NII dipped from $240 million to $224 million. Safety Net penalizes companies for declining cash flow, because if it’s the beginning of a trend, it could mean trouble for the dividend. Sometimes, the lower cash flow is a one-off event and not the start of something dangerous. But Safety Net still downgrades the stock’s dividend safety rating by one level as a caution sign.

This year, New Mountain Finance is projected to grow NII to $293 million – its highest amount in years. Should the company deliver anything above $224 million in 2025, its rating will receive an upgrade.

Despite the drop in NII, the good news is that out of the $224 million, New Mountain only paid $147 million in dividends for a 66% payout ratio. This year, dividends paid are forecast to grow to $154 million, but because of the significant expected growth in NII, the payout ratio is projected to fall to 53%, giving the company even more of a buffer.

Here’s the bad news.

New Mountain Finance has cut the dividend four times since 2020, including three times in the last 13 months. (That’s only including the regular dividend, not the special dividend, which the company often issues as well.)

To be fair, the three recent cuts occurred because the company raised the dividend and then had to cut it back. But a management team that is willing to lower the dividend will likely do so again.

The current $0.32 per share quarterly dividend comes out to a yield of over 12%. As long as New Mountain generates the expected amount of NII, it can afford its dividend. But the track record of regular dividend cuts means that investors can never really feel like the dividend is safe.

Dividend Safety Rating: F

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.

The post Has New Mountain Finance’s 12% Yield Reached Its “Peak”? appeared first on Wealthy Retirement.

I said I liked the stock – which was true.

But even though I liked its outlook at the time, I didn’t recommend it to my subscribers in The Oxford Income Letter.

I’ll tell you why in a moment, but first, let me take you behind the scenes of TV land.

I’m Ready for My Close-Up

When a producer calls and asks you to be on a show to give your thoughts on a stock, they want strong opinions. The producer doesn’t want you hedging your position. A wishy-washy answer doesn’t make for good television.

If you don’t give them what they want, they will find someone else. After all, there are lots of people who would love the opportunity to talk to hundreds of thousands of viewers at once.

I won’t go on TV and say something about a stock unless I believe it. I’ve told producers in the past, “I don’t have a strong opinion on this one.” If they’re looking for a bull and I’m a bear, I’ll admit to them, “Sorry, I don’t like it.”

I know that people will act on what I say. No one should buy a stock because they hear someone talking about it for 90 seconds on TV, but people do. I learned that years ago, before I joined The Oxford Club – back when my then-boss refused to take responsibility for any of his market calls.

I was the one reading the emails that people sent him to tell him how much money they lost on his advice.

He didn’t want to hear it or believe it. But I knew these were real people investing real money based on what he said. I’ve never forgotten those emails.

After I appear on TV, I get calls from friends and family asking if they should buy the stock.

So why did I tell CNBC viewers that I liked this telecom stock and then not recommend it to my subscribers?

Increase Your Buying Power

It has to do with my specific strategy for investing in the best dividend stocks. It’s called the 10-11-12 System, and it is designed to achieve 11% yields and/or 12% average annual total returns within 10 years.

The entire goal of the model portfolios in The Oxford Income Letter is to generate solid income today – and even more tomorrow. Typically, the stocks of companies that raise their dividends go higher and outperform the market.

The secret sauce is dividend growth.

The companies that I recommend in The Oxford Income Letter‘s portfolios have long histories of raising their dividends every year – usually by a meaningful amount, such as 10% or more.

Think about what that does for an investor.

If inflation sits at 2.4% per year, what costs $1,000 today will cost $1,126 in five years and $1,268 in 10. If inflation returns to the historical average rate of 3.4% per year, $1,000 worth of goods will cost $1,182 in five years and $1,397 in 10.

That means the 10% dividend raiser easily beats inflation. It actually increases your buying power, improving your quality of life and ability to save.

An investor who receives $1,000 in dividends today and whose dividend payout increases 10% per year receives $1,610 in five years and $2,594 in 10.

The stock that I mentioned on CNBC was and is a great company – a leading telecommunications company with growing margins and earnings.

It had paid a dividend every year for decades and consistently raised it. But it didn’t have impressive dividend growth, so it was not likely to help income investors get where they want to go.

However, a stock that has a similar starting yield to that company’s but grows its dividend by 10% per year will yield 9.9% in 10 years.

A $10,000 investment in even a 4% dividend grower will generate only $597 in income in 10 years, while the same investment in a stock with 10% dividend growth will spin off $990. That’s a big difference.

Best Buy (NYSE: BBY) is a great example of the kind of dividend-growing stock I’m talking about. The company has raised its dividend by an average of 11% per year over the past five years.

While Best Buy’s 4.2% yield today may not knock your socks off, if the company maintains an 11% dividend growth rate, its yield will be much more attractive a few years from now.

Here’s the bottom line: Buy stocks with sizable and safe yields if you’re most focused on short-term income. But if you’re looking for a way to ensure your investments generate a significant amount of income in the future, be sure to stick with dividend growers that raise their dividends by meaningful amounts.

The post Supercharge Your Portfolio With Dividend Growers appeared first on Wealthy Retirement.

The business development company, or BDC, lends money to and invests in private companies. The stock is very popular with income investors because of its 13.2% yield, its low share price, and the fact that it pays a dividend monthly.

Let’s see whether the company can actually afford its dividend.

In Prospect Capital’s fiscal year that ended on June 30, 2023, it generated $421 million in net investment income (NII). NII is the measure of cash flow that we use for BDCs. It tells us how much money the company’s investments made after expenses.

That 2023 NII figure was up sharply from the previous two years.

When the company reports results from its most recent fiscal year next month, I estimate it will report $457 million in NII. We’re seeing solid growth over the past year and over the past three years, which is a great sign.

You can see from the chart above that NII has been steadily growing, as has the total amount of dividends paid – though it’s important to note that the total dividend payout has increased because the number of outstanding shares has risen, not because the dividend itself has risen. The company’s monthly dividend per share has remained at $0.06 for more than six years.

BDCs must pay out 90% of their profits in dividends, so I’m OK with them paying out up to 100% of their NII. (Profits and NII aren’t the same thing, but they are similar.) Prospect Capital’s 2023 payout ratio of 71% and its expected 79% payout ratio in 2024 are well within my comfort zone.

The only problem I have with Prospect Capital’s dividend safety is its history of reducing the payout to shareholders.

Granted, it hasn’t done so since 2017, but it slashed its dividend twice in the three years before that – and pretty dramatically. The dividend is 46% lower now than it was prior to the decline.

If Prospect Capital keeps its dividend stable over the next few years, the past cuts will start to age out of the Safety Net model, and its grade should improve. Until then, even though the company can afford the dividend right now, investors should be wary that another cut could be coming if times get tough.

Dividend Safety Rating: C

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds or closed-end funds.

The post Prospect Capital’s 13.2% Yield Is Hard to Trust appeared first on Wealthy Retirement.

After a year of training and five canceled races, I’m about to run a socially distanced ultramarathon.

This ultramarathon is called the “S3.” The “S” stands for “Sinister.” The course covers 66 kilometers and 9,000 feet of elevation in Rocky Mountain trails in Crowsnest Pass, Alberta.

But finishing the race won’t be the most important thing that happens to me on that day…

My wife, Stacey, and I will be celebrating our 20th wedding anniversary.

Unlike an ultramarathon, being married to her has been no challenge at all. I wish everyone could have a partner who wakes up happy every single day and makes life so much fun.

Seeing Stacey and my two kids at the finish line will be the best moment of my entire year.

Investing Is Like an Ultramarathon

Like in an ultramarathon (or relationship), when investing, it’s easy to go too hard early. Success requires patience.

Watching the share prices of Citigroup (NYSE: C), Wells Fargo (NYSE: WFC) and Bank of America (NYSE: BAC) languish after releasing third quarter earnings that I thought were pretty good reminded me of that…

I went into this earnings season expecting that a drop in loan-loss provisioning would be the catalyst that would move bank shares higher.

I was right about the big improvement in loss reserves.

Citigroup’s provision for credit losses dropped from $7.9 billion in the second quarter to just $2.26 billion in the third quarter.

Wells Fargo’s provisions fell from $8.4 billion to just $769 million. Bank of America’s provisions declined from $5.1 billion to only $1.4 billion.

These declines exceeded my optimistic expectations, yet they failed to light a fire under the stock prices of the banks. Instead, the share prices of these companies dropped.

Instead of feeling relief that the worst of loan-loss provisioning is now behind us, the market focused on the damper that low interest rates are putting on lending income.

It’s a legitimate concern…

And with the Fed signaling low rates for the foreseeable future, interest rates are going to be a headwind for banks’ earnings growth for a while.

While low rates aren’t helpful, when I look at the big banks, I see stocks that are historically cheap on traditional valuation metrics.

Citigroup and Wells Fargo especially, which are trading at just 50% of book value, are almost comically inexpensive.

Combine that with the fact that the balance sheets of the banks are also historically strong, and these rock-bottom valuations are even more appealing.

Given these valuations and the fact that shares could easily double, the downside is virtually nonexistent.

I hope this trade doesn’t test our patience as much as an ultramarathon. But if it does, the risk-reward offered here is worth it.

Good investing,

Jody

The post Why the Big Banks Are Worth the Wait appeared first on Wealthy Retirement.