Special Dividend from T. Rowe Price - Analyst BlogFriday, December 07, 2012
The shareholders of T. Rowe Price Group Inc. (TROW) now have a reason to applaud. The company has recently declared a special cash dividend of $1.00 per share, which will be paid on December 28, 2012 to stockholders of record as of December 17.
With this special dividend, T. Rowe Price joins the bandwagon of companies declaring special dividends in the recent past. This comes as a result of probable increase in tax on dividends next year.
T. Rowe Price is committed to return value to shareholders with its strong cash generation capabilities. Following this special cash dividend, the company will continue to maintain a solid balance sheet with no corporate debt as well as cash and mutual fund investment holdings of around $2 billion.
As a matte of fact, in February 2012, T. Rowe Price’s Board of Directors approved a 10.0% hike in its quarterly common stock dividend. The revised quarterly dividend now stands at 34 cents per share compared with the previous amount of 31 cents per share. This marked T. Rowe’s 26th consecutive annual dividend increase.
Baltimore-based global investment management organization, T. Rowe Price had $574.4 billion in assets under management (AUM) as of September 30, 2012. We believe that the company has the potential to take advantage of the economic recovery and benefit from the growth opportunities in the domestic and global AUM. Yet, competitive pressures amid economic headwinds remain the major causes of concern.
Recently, Franklin Resources Inc. (BEN) announced a special cash dividend of $3.00 per share for its shareholders. This dividend will be paid on December 20, 2012 to shareholders of record as of December 6.
Among others, California-based City National Corporation (CYN) announced a special cash dividend of 25 cents per share, which will be paid on December 18, 2012 to stockholders of record as on December 3.
T. Rowe Price currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We believe the announcement of special dividend will be an appropriate step for the company to enhance shareholders’ confidence, which might lead to positive estimate revisions in the near term. This, in turn, could cause an improvement in the Zacks Rank.
FRANKLIN RESOUR (BEN): Free Stock Analysis Report
CITY NATIONAL (CYN): Free Stock Analysis Report
T ROWE PRICE (TROW): Free Stock Analysis Report
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