Acquisition TROW

t-rowe-price-logo1Feels great getting back into the groove and buying a great business to compliment my current portfolio. TROW has been flying low in DGI community until these last several weeks. Some of the reasons it stood out as the go to stock for DGI investors is that the company has been very pro shareholder by recently announcing dividend increase of 18.1% and declaring a special one time dividend of $2.00 per share.

Founded in 1937, T. Rowe Price Group, Inc. is an asset management company that provides investment services to individuals and institutional investors worldwide. It provides retirement plans, foundations, endowments and financial intermediaries services between individuals and institutions. Through its subsidiaries it manages separate client-focused equity, fixed income, balanced portfolios, common trusts and institutional mutual funds. The company conducts in-house research to make investments and currently manages a record of $746.8 billion of assets and growing.

  • Dividend Yield: 2.53%
  • 3Yr Divided Growth Rate: 12.4%
  • Payout Ratio: 42.9%
  • P/E: 18.4
  • 29 Consecutive Years of Dividend Raises

This is the second time I am initiating an acquisition this year and makes this purchase the 27th business I am vested in. It represents about 1.6% of my current portfolio. Though the big draw for me was solid fundamentals of the business and a special dividend this company declared. When properly calculated based on the purchase price, the special dividend and regular dividend comprise to be automatic return on the investment of 3% right off the bat. In other words, its like receiving 1 year and 3 months worth of dividend in just 3 months.

I purchased 12 shares for the price of $82.40 adding $24.96 to my annual income.

The 12-month dividend income increased to $2,191.

Thank you for reading & have a great day!

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9 Comments

  1. Captain Dividend on March 14, 2015 at 18:43

    TROW has been very popular among dividend investors recently. I’ve been seeing a lot of buying in the community and I can see why. Did they give the reason for the one time dividend though?

    • DividendVet on March 14, 2015 at 19:23

      Absolutely, seems like quite a few of our fellow DGI investors are buying shares up and the reasons are quite clear.

      According to James A.C. Kennedy, the company’s chief executive officer and president, commented: “This special cash dividend is an efficient return of capital to our stockholders and reflects the healthy cash position on our balance sheet. After the special dividend payment, the company’s balance sheet will remain very strong, with ample liquidity and no corporate debt. Further, we believe that the payment of the special cash dividend will not have a material impact on the company’s ability to meet its ongoing financial needs, continue our outstanding dividend record for the foreseeable future, and maintain a buffer against market volatility.” (TROW Investor Relations)

      Thanks for stopping by.

  2. A Frugal Family's Journey on March 14, 2015 at 23:05

    Nice pick up DV…TROW is currently high on our watch list. And it seems to be pretty popular among dividend stock investors lately, including Dividend Mantra, Passive Income Pursuit.

    Hope you don’t mind, we’ve added your purchase to our Collection of Recent Buys. 🙂

    Keep up the momentum. AFFJ

    • DividendVet on March 15, 2015 at 17:34

      Thank you, popular indeed and the reasons are clear as daylight. Lets hope good things will continue for TROW for many more years and many more special dividends.

      Best wishes.

  3. Dividend Mantra on March 15, 2015 at 11:07

    DV,

    Glad to have you on board as a fellow shareholder. The fundamentals are really strong here, which I recently pointed out. A major pullback in equities would likely be a short-term headwind due to a drop in AUM and possibly outflows, but they’ve “been there and done that”. I’m really looking forward to that special dividend!

    Best regards.

    • DividendVet on March 15, 2015 at 17:50

      Likewise Jason, good having you as a fellow shareholder. There is no doubt of fundamentals strength, also awesome analysis of the company, you always do a great job at that.

      As far as for assets under management go, I think people will continue investing their money the traditional way for a long time to come. Not many people have the drive or the time in managing their own assets. Though, even if a major pull back in AUM does happen, like you said, they have been there before with the most recent crash.

      Yeah, the special dividend is like the frosting on the cake. Enjoy! I know I will.

      Good hearing from you.

  4. FerdiS on March 15, 2015 at 22:52

    Another TROW buyer — makes me very interested, so I’ll have a look at it and maybe jump in too!

    Thanks for the update, take care!

    • DividendVet on March 15, 2015 at 22:58

      One of the many good ones. 😉

      Happy hunting.

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