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T. Rowe Price Group, Inc. (TROW)

Company Dividend Discount ModelIndustry: Asset ManagementSector: Financial Services

Valuation Snapshot

Stable Growth$151.17 - $291.76$207.29
Multi-Stage$147.91 - $161.36$154.51
Blended Fair Value$180.90
Current Price$102.64
Upside76.25%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS9.12%9.41%5.135.075.007.693.823.323.142.542.444.78
YoY Growth--1.24%1.29%-34.93%101.22%15.25%5.70%23.30%4.12%-48.93%129.17%
Dividend Yield--5.58%4.21%4.43%5.08%2.23%3.39%3.04%2.36%3.58%6.51%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,067.00
(-) Cash Dividends Paid (M)1,434.80
(=) Cash Retained (M)632.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)413.40258.38155.03
Cash Retained (M)632.20632.20632.20
(-) Cash Required (M)-413.40-258.38-155.03
(=) Excess Retained (M)218.80373.83477.18
(/) Shares Outstanding (M)221.38221.38221.38
(=) Excess Retained per Share0.991.692.16
LTM Dividend per Share6.486.486.48
(+) Excess Retained per Share0.991.692.16
(=) Adjusted Dividend7.478.178.64
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate3.94%4.94%5.94%
Fair Value$151.17$207.29$291.76
Upside / Downside47.28%101.96%184.25%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,067.002,169.192,276.432,388.972,507.072,631.022,709.95
Payout Ratio69.41%73.53%77.65%81.77%85.88%90.00%92.50%
Projected Dividends (M)1,434.801,595.041,767.621,953.362,153.152,367.922,506.70

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate3.94%4.94%5.94%
Year 1 PV (M)1,448.331,462.271,476.20
Year 2 PV (M)1,457.411,485.591,514.03
Year 3 PV (M)1,462.421,505.041,548.47
Year 4 PV (M)1,463.731,520.881,579.68
Year 5 PV (M)1,461.671,533.351,607.81
PV of Terminal Value (M)25,449.7026,697.6927,994.16
Equity Value (M)32,743.2734,204.8035,720.36
Shares Outstanding (M)221.38221.38221.38
Fair Value$147.91$154.51$161.36
Upside / Downside44.10%50.54%57.21%

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