Highlighted Stock with Solid Fundamentals: T. Rowe Price
I have read and followed value investing and stocks for a couple of decades, and what I have found is that it can work, even for a common investor. This blog post is in a planned series of highlighted stocks of publicly traded companies that I have personally determined to have solid fundamentals for value investing. This means that they have passed overall the test of the list of checks that I have given in my investing guides: “Your Ultimate Investing Checklist to Screen for the Best Company Stocks,” as well as “How to Successfully Approach Long-Term Investing and Screen for Individual Stocks By Value Investing.”
I am going to give you a general overview of the companies, as well as their financial fundamentals, and allow you, if you are interested, to do further research to find out more information about them, to see if they might fit in your investment portfolio. Keep in mind that there are many well-run companies out there, and I am only reviewing a limited number of them, so my hope is that you can use these summaries as examples in how you look at the fundamentals of other businesses, also, to help determine if they may be a good investment for you.
Highlighted Company: T. Rowe Price (NASDAQ: TROW)
General Overview
T. Rowe Price (TROW) provides asset-management services for individual and institutional investors. It offers a broad range of no-load us and international stock, hybrid, bond, and money market funds. It had about 1.7 Trillion Assets under management (AUM) by July 2025, making it one of the top ranked asset management firms, globally.
About 2/3 of managed assets are in retirement accounts, which are stickier assets (having higher switching costs - meaning clients are less likely to withdraw their funds). (Morningstar)
“While T. Rowe Price (TROW) is adapting to market trends and evolving client needs, its core business model—earning fees by actively managing assets—has not fundamentally changed. The firm has enhanced its offerings with new strategies and products, but its basic principle of generating revenue from AUM remains the same.” (Google AI Overview)
Financial Fundamentals
High return on equity
Increasing revenues
Increasing net income and earnings per share
Decreasing outstanding shares (share repurchases)
No long-term debt and high cash-on-hand: making it difficult to go bankrupt
Increasing retained earnings and shareholder equity
High net margins
TROW also currently pays a moderately high dividend of 4.69%
(Macrotrends; Yahoo! Finance)
Synopsis
TROW can be considered as a stock for income, with its solid and consistent dividend, as well as for growth, with its increasing earnings. With its strong brand, sticky retirement assets, large scale, and proven active management strategy, you may want to consider having TROW as a long-term holding in your investment portfolio.
TROW fundamental analysis (Google AI Overview)
Price Check
Use the chart on the website given below, to try to value TROW’s intrinsic value, and the margin of safety at different earnings projections, and the current price:
https://www.gurufocus.com/stock/TROW/dcf
On the middle left of the page, you may want to choose Earnings per Share (EPS w/o NRI), and not free cash flow (FCF), since its 10-year FCF avg. is affected by a one-time legal issue in 2016-17.
On the line below, you can adjust the discount rate, which gives your desired average annual rate of return.
The other prepopulated values should be appropriate, so you can look at the meter in the middle of the page to determine your buy price, and the estimated margin of safety.
To look up other stocks, you can go to https://www.gurufocus.com/dcf-calculator
To learn more about investing in stocks of solid companies at reasonable prices, you can go to:
Note:
You may want to have your stock investments be part of an overall financial plan, as outlined in the financial life area of this website. You may also want to hold your stocks for a minimum of about at least 3 years, since they can fluctuate in the near-term, but usually track earnings over the long-term.
If you are not comfortable with investing in individual stocks, you may instead choose to invest in a broadly diversified index fund or ETF (exchange-traded fund), to benefit from being in the market, while mitigating your risk.
In general, here is an excellent article regarding “conservative”to “aggressive” portfolios, based on your time frame and risk tolerance.
There are also "target-date funds" that balance out your portfolio as it goes along, according to your requested timeline and risk tolerance.
An investing method that is recommended for most people, by famous value investor, Warren Buffett, is to put your money into a fund that matches the S&P 500.
As far as how often, and how much to invest in funds, the general recommendation is to do it periodically, by dollar-cost averaging, with the same amount of money at each time period - such as weekly, biweekly, or monthly.
Whatever type of fund portfolio you choose, make sure that you keep the administrative and management fees low, as these can greatly erode your returns over the long-term.
Disclaimer: This article is meant for informational and example purposes only. I do not have any personal association or investment in this company, or GuruFocus, or receive any compensation from them, or the mentioned securities. I am not a financial advisor, and am not promoting the purchase or sale of any kind of securities. Securities such as stocks, bonds, and ETF’s can fluctuate with market conditions, and investor sentiment. Also, I recommend that investing in stocks should be done within the framework of a comprehensive financial plan, with risks taken into account. You may also want to consult with a Certified Financial Planner.