T. Rowe Price Group – Growth And Income – Zacks Rank Buy

T. Rowe Price Group, Inc. (TROW) saw a nice spike after announcing third-quarter results. Earnings per share of 50 cents were below last year's 56 cents but topped the Zacks Consensus Estimate by 9%. The company also reported a 16% increase in assets under management, totaling $366.2 billion.

Company Description

T. Rowe Price Group, Inc. is a global investment management organization that provides a broad array of mutual funds, subadvisory services and separate account management for individual and institutional investors, retirement plans and financial intermediaries.

The company offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research.

Shares Jump on Third Quarter Results

T. Rowe Price saw a nice spike after announcing third-quarter results. Earnings per share of 50 cents were below last year's 56 cents but topped the Zacks Consensus Estimate by 9%.

The company also reported a 16% increase in assets under management, totaling $366.2 billion.

Management said the firm's investment advisory results relative to peers remain strong, with 87% of the T. Rowe Price funds across their share classes surpassing their comparable Lipper averages on a total return basis for the 5-year period ended September 30, 2009, 83% outperforming for the 3-year period and at least 79% outperforming for the 1- and 10-year periods.

The company also noted that it remains debt-free with substantial liquidity, including cash and mutual fund investment holdings of $1.4 billion that supports TROW's ability to continue investing for the future.

During the past month, TROW's return has more than doubled that of the major averages.

Bullish Forecasts

Analysts polled by Zacks have been hiking earnings estimates. The current full-year projection of $1.61 per share is up from last month's $1.48. For 2010, the Zacks Consensus Estimate of $2.36 per share climbed from $2.05 over the past 30 days.

Stellar Fundamentals

In addition to having a balance sheet that shows no debt, TROW offers a solid return on equity (ROE) of 12.7%, which is in line with the industry average. The company's net profit margin of 17.5% soars past the industry average of 8%. This Growth and Income pick also pays an industry-leading dividend yield of 2%.

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