T. Rowe Price Has Increased Its Dividend for 40 Consecutive Years and Yields 4.4%. Is the Payout a Bargain or a Value Trap?
The stock is acting like the company is a has-been. There's a critical detail, however, that could eventually change everything currently holding this ticker down.
Overview
Investors generally agree that an undervalued stock is a better buy than an overvalued one. And, for income investors, a higher dividend yield is better than a lower one. Not every cheap dividend payer with a big yield, however, is necessarily worth buying. Sometimes cheap stocks are cheap for a reason.
That's the conundrum anyone holding or eyeing a stake in mutual fund manager T. Rowe Price (NASDAQ: TROW) is facing right now. The stock's dirt cheap at a forward-looking price-to-earnings ratio of less than 12, and its solid forward-looking dividend yield of 4.4% is backed up by 40 years of uninterrupted dividend growth. The fact that the stock hasn't made any net gains since the middle of 2022, however, is tough to ignore.
Details
Is this investors' warning that TROW is nothing more than a value trap? Yes. But that doesn't mean the crowd is right.
Source
Originally published at www.fool.com.
Related Articles
- The late James Van Der Beek’s former Beverly Hills home up for rent for $13,950 a month
- Texas Instruments shares are sliding, and its rival is doing even worse. What’s going on in the world of analog semiconductors.
- SpaceX Outlook: Where the Stock Price for This $1.5 Trillion Giant Could Land in 2027