One big part of why T. Rowe Price hasn’t moved into ETFs is that the active-ETF space right now requires daily disclosure of holdings. That’s inconsistent with the proprietary models that T. Rowe Price and other managers use, and while rival Pimco has been successful with its PIMCO Total Return Bond active ETF, the structure of the bond market makes copycat investing a lot harder than with the stock funds that make up much of T. Rowe Price’s business.
T. Rowe Price’s dividend growth took a brief pause during the financial crisis, but it has started to ramp back up again as the expansion has taken root. It was even able to make a $1-per-share special-dividend payout last year, and with a regular payout boost of nearly 12% just last month, T. Rowe Price Group, Inc. (NASDAQ:TROW) doesn’t seem to be hurting from ETF competition.
When will dividends rise again?
Because T. Rowe Price just increased its dividend, investors shouldn’t expect another boost until 2014. Nevertheless, T. Rowe Price has demonstrated its status as a strong dividend stock, and if the company can meet the challenges of the fund industry, it stands to keep raising its dividends well into the future.
The article T. Rowe Price: A Smart Dividend Stock originally appeared on Fool.com is written by Dan Caplinger .
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends BlackRock, Starbucks, and Whole Foods Market. The Motley Fool owns shares of Starbucks and Whole Foods Market.
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