The Best Stock in Maryland: T. Rowe Price

We scoured the nation to identify the best stock in every state. T. Rowe Price (symbol TROW) is the publicly traded company we picked in Maryland. The company headquarters is located in Baltimore.

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A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.

T. Rowe Price by the Numbers

• Headquarters: Baltimore
• Share price: $73.20
• Market value: $17.7 billion
• Price-earnings ratio: 15

(Prices and data are as of June 22, 2017)

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Like all active asset managers these days, T. Rowe Price faces pressure to win investor dollars that are increasingly finding their way to passively managed mutual funds and exchange-traded funds. But the venerable fund house’s first-quarter results were still respectable. The company posted a 12% increase in sales over the same quarter last year, as assets under management rose 16% and investment advisory fees rose 14%. (Advisory fees account for more than 80% of the firm’s annual revenues.) Value Line analyst Frederick Harris expects earnings growth of 12% this year and a more modest 4% in 2018. But the performance of T. Rowe’s funds is encouraging. Through March, 82%, 79% and 85% of T. Rowe’s mutual funds beat their peers on a three-, five-, and 10-year basis, respectively.

The funds’ strong relative performance should continue to attract investor assets, says CFRA analyst David Holt. And because about two-thirds of the company’s managed assets are in retirement accounts, he adds, T. Rowe boasts a higher rate of asset retention than that of many competitors. He rates the stock a “buy,” with a 12-month price target of $79. Following a 5.6% bump, the company’s quarterly dividend stands at 57 cents per share, for a yield of 3.1%.

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