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.

So, while Chief Income Strategist Marc Lichtenfeld is out this week, I thought it would be fun to shake things up a bit and review all three of these stocks at one time – pitting them against one another to find the ultimate champion.

Let’s start by looking at T. Rowe Price, an investment management firm similar to Vanguard or Fidelity. A huge amount of the company’s income comes from investment advisory fees, and revenue has seen a steady increase in the past year. At current prices, the stock yields 4.8%.

Free cash flow took a massive hit in both 2022 and 2023. However, 2024 saw a bounce back with a 38.5% gain, and free cash flow is projected to nearly double this year.

A major downside is that T. Rowe Price’s dividend payout ratio currently sits at 90%, which is above our threshold of 75%. The good news is that the company has increased its dividend every year for the last decade, earning it some brownie points.

Next, let’s talk about Western Union. This company specializes in money transfer, allowing its customers to securely send money to people or businesses across borders. The company covers the areas that banks can’t by acting as a liaison for those that don’t have a bank account or who need cash immediately. (A bank wire transfer can take one to three days.)

Turning to the safety of its dividend, we see a couple of red flags that could jeopardize its attractive 11.2% yield.

First off, Western Union’s free cash flow has been all over the place. It peaked in 2021 at $900 million but has been bouncing around ever since. Free cash flow in 2024 was down 50% from the previous year and down 60% from three years prior.

On top of that, Western Union announced in August that it will be acquiring International Money Express (Nasdaq: IMXI), which will result in a major hit to the company’s free cash flow.

The company’s dividend payout ratio, just like T. Rowe Price’s, is sitting above our 75% threshold at 90%.

Finally, let’s look at Peoples Bancorp, a company that provides banking services from Ohio to Maryland. The stock yields a solid 5.5%.

The company’s biggest revenue source is net interest income, or NII – the difference between the money it earns from loans and investments and the interest expense it pays on deposits. We will be using that metric to measure free cash flow.

NII is up both on the year and over the last three years. The forward-looking estimates predict an even larger increase this year.

The company’s payout ratio currently sits at 16%, well below our 75% threshold. Its balance sheet looks stellar as well.

On top of all of that, Peoples Bancorp has increased its dividend every year for the past 10 years.

Now, it’s time to reveal the results of our first-ever Clash of the Finance Titans (it’s a working title).

In third place, we have Western Union with a grade of “F.”

Based on our scoring system, the company’s dividend has a high risk of being cut. I’m concerned about its inconsistent cash flow and high payout ratio.

In second, we have T. Rowe Price with a “C.”

There’s some risk here, but the company’s cash flow growth projections and strong dividend track record should help.

And in first place, we have Peoples Bancorp with a mighty “A.”

This is one of the safest dividends I’ve ever seen. I’d even go as far as to say that you’re more likely to see a dividend raise than a dividend cut.

Western Union Dividend Safety Rating: F

T. Rowe Price Dividend Safety Rating: C

Peoples Bancorp Dividend Safety Rating: A

If you enjoyed this format, let us know by either commenting below or sending us an email here.

And, as always, feel free to send us more companies whose dividends you’d like us to review.

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.

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