Wall Street Analysts Say Sell on This Stock. Here’s Why They’re Wrong.

For a pure play asset administration agency like T. Rowe Price (NASDAQ: TROW), its fortunes are going to largely be tied to the fluctuations of the inventory market.

When shares are up and markets are rising, T. Rowe Price goes to do nicely, as a result of its charges are primarily tied to belongings underneath administration of their institutional separate accounts, mutual funds, and exchange-traded funds (ETFs). When markets are up, there’s usually extra funding circulation into its funds, as a result of buyers usually chase returns. This additionally serves to boost asset ranges, charges, and income.

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When markets are down, the alternative is true. Assets ranges depreciate, so charges go down, and infrequently, fund flows decelerate.

So, with markets down in 2026, it ought to come as no shock that T. Rowe Price inventory is down yr to this point by about 10%.

Wall Street analysts have a detrimental view of the inventory, primarily based on a number of elements. The main subject was that T. Rowe Price reported $25.5 billion in outflows within the fourth quarter. That seemingly needed to do with the down market in This fall and buyers cashing out. But the corporate additionally reported a 16.5% enhance in working bills, which triggered it to overlook estimates.

As of April 10, some 33% of analysts had rated T. Rowe Price inventory a promote, with solely 7% calling it a purchase. The lion’s share of analysts, 60%, rated it a maintain.

I are inclined to agree with the minority, as I feel T. Rowe Price is a strong purchase proper now. Here’s why.

I get why analysts is perhaps tepid on T. Rowe Price, given the truth that markets are down this yr and the outlook for 2026 may be very unsure. That may end in restricted upside for the inventory.

However, it’s the kind of market the place buyers are flocking to dividend shares, and you might not discover many higher dividend shares than T. Rowe Price.

The firm has elevated its dividend for 40 straight years, together with a 2% enhance in January to $1.30 per share. Over the previous 5 years, it has grown its dividend at a charge of about 6% per yr. It additionally has a really manageable payout ratio of 52%. The cause that T. Rowe Price has been capable of constantly increase its dividend yr after yr is due to its fortress stability sheet.

The firm has no long-term debt, and solely about $469 million in short-term debt. It has a minuscule debt-to-equity ratio of three.89%. It additionally had $2 billion in free money circulation in 2025 and ended the yr with $3.8 billion in money and equivalents. That is a recipe for a soon-to-be Dividend King.

In addition, it has a ridiculously excessive dividend yield of 5.64%. Of all of the shares which have elevated their dividend for greater than 25 straight years, T. Rowe Price’s yield is the second highest.

There are a pair different issues to notice about T. Rowe Price. One, it’s recognized primarily as an energetic supervisor, and through the bull market, it took a again seat to the large indexers that offered sturdy returns with low bills. But with the kind of market uncertainty and rotation we’re seeing now, its penchant for inventory choosing may give it a bonus.

While it was late in providing ETFs, it now has a full roster of energetic ETFs with five-year monitor data. That ought to put it on the radar of extra buyers, notably institutional buyers, which require longer monitor data.

Overall, for its nice dividend alone, T. Rowe Price is a purchase for earnings buyers. But it may additionally stand out amongst its friends because the bull market morphs into one thing which may favor energetic administration.

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Dave Kovaleski has no place in any of the shares talked about. The Motley Fool has positions in and recommends T. Rowe Price Group. The Motley Fool has a disclosure policy.

Wall Street Analysts Say Sell on This Stock. Here’s Why They’re Wrong. was initially printed by The Motley Fool