We recently published a list of 12 Highest Dividend Stocks to Buy on Cash App. In this article, we are going to take a look at where T. Rowe Price Group, Inc. (NASDAQ:TROW) stands against other highest dividend stocks to buy on cash app.
Technology has seamlessly woven itself into our daily lives in today’s digital era, significantly impacting how we manage finances. The shift from physical wallets to digital platforms is becoming increasingly common. Cash App has become a prominent player in the digital financial space, steadily growing in popularity. This mobile payment service allows users to send, receive, and request money from individuals and businesses alike. Since its launch in 2013, Cash App has become one of the most widely used digital wallets in the US, competing with other platforms like Venmo and Zelle. The Consumer Financial Protection Bureau (CFPB) reported that Cash App now boasts over 56 million accounts, with Block, its developer, earning over 50% of its gross profit from the app in 2023.
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The pandemic served as a catalyst, speeding up the rising trend of app usage, especially in the financial sector. With lockdowns and social distancing measures in place, people increasingly relied on online platforms for shopping, highlighting the importance of contactless payments. This change in consumer habits drove a surge in app usage, enabling a smooth transition to remote and contactless transactions. Zelle, the peer-to-peer money transfer app, reported a 27% increase in network transactions during the first half of 2024, with nearly $500 billion in payments processed. In the first six months of the year, consumers and businesses completed 1.7 billion transactions across 143 million accounts, as reported by Bloomberg.
This mainly highlights the promising future of online payments and their continued growth across upcoming generations. In fact, Block CFO Amrita Ahuja shared with CNBC’s Jim Cramer that Cash App’s payment services are particularly popular among younger consumers. Ahuja pointed out that the Cash App card, a free Visa debit card, has gained significant traction with this demographic. She also highlighted that Cash App successfully engages the younger generation through initiatives like a family program, which enables adults to sponsor accounts for teenagers.
That said, with success comes increased risk. Recently, Cash App has faced challenges, as the CFPB accused the platform of enabling widespread fraud and misleading its users. In 2023, Hindenburg Research, a well-known short seller, claimed that Block had inflated the number of Cash App users and highlighted illegal activities on the app. Block dismissed the report as “factually inaccurate and misleading.” In its enforcement action, the CFPB stated that Block is legally obligated to investigate and resolve disputes regarding unauthorized transactions, but described the company’s efforts as “severely lacking.” Instead, Block reportedly directed users to request their banks to reverse transactions, which Block would subsequently deny. As a result, Block will pay up to $120 million in refunds to consumers, establish a 24-hour customer service program, and pay a $55 million fine.
Across different investment platforms, investors consistently prioritize generating cash flow. This focus on cash generation drives them towards dividend stocks, which are well-known for offering shareholders a steady stream of income.
Our Methodology
For this article, we reviewed multiple reliable websites and videos that discuss dividend stocks available on Cash App. Our goal was to identify stocks that were consistently recommended by credible sources and analyst reports. After analyzing the gathered information, we selected 12 stocks that stood out due to their dividend yields exceeding 4% as of January 21. These stocks are ranked in order of their dividend yields, starting from the lowest. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A venture capitalist analyzing investment opportunities in late-stage transactions.
T. Rowe Price Group, Inc. (NASDAQ:TROW)
Dividend Yield as of January 21: 4.37%
T. Rowe Price Group, Inc. (NASDAQ:TROW) ranks tenth on our list of the best Cash App stocks that pay dividends. The American asset management company offers a wide range of related products and services to its consumers. The company recently reported that its assets under management slid 3.6% in December to $1.61 trillion as it saw net outflows of $10.9 billion and equity markets declined. However, it is just a blip on the road for the company as it is exploring new opportunities.
T. Rowe Price Group, Inc. (NASDAQ:TROW) is concentrating on developing its own ETF business while expanding into high-demand areas such as alternative investments. With no long-term debt on its balance sheet, it enjoys significant flexibility to adapt and make strategic adjustments as necessary.
The company delivered mixed earnings in the third quarter of 2024. The company’s revenue increased by 7% year-over-year to $1.8 billion but missed analysts’ projections by over $61 million. On the upside, net income saw a notable rise of 33.1%, climbing to $603 million from $453 million in the prior year. T. Rowe Price Group, Inc. (NASDAQ:TROW)’s equity ETFs showed strong performance, with improved sales pipelines and lower-than-anticipated net outflows. Moreover, its strategic emphasis on alternative investments, including private credit, is poised to provide substantial diversification advantages.
Lindsell Train Ltd made the following comment about TROW in its Q3 2024 investor letter:
“T. Rowe Price Group, Inc. (NASDAQ:TROW) is the only asset manager held in your Fund. The headwinds to this industry, notably the long-term shift to passive and resultant fee pressures, are well known, leading to mouthwatering valuations for what can be extremely profitable companies. In our view T. Rowe stands out with trillion-dollar scale, exceptional margins, and a long track-record of headwind-defying growth, affording it a place in our portfolio since inception. Its shares, however, have not been stellar performers over this four-year+ period, returning just c.30% in USD vs. the MSCI North America’s c.120%. In this month’s update we outline our reasons for continued optimism.” (Click here to read the full text)
T. Rowe Price Group, Inc. (NASDAQ:TROW) also holds a strong dividend history. The company is a Dividend Aristocrat with 38 consecutive years of dividend growth under its belt. It currently offers a quarterly dividend of $1.24 per share and has a dividend yield of 4.36%, as of January 21.
As of the close of Q3 2024, 26 hedge funds in Insider Monkey’s database held stakes in T. Rowe Price Group, Inc. (NASDAQ:TROW), compared with 28 in the previous quarter. These stakes have a total value of over $422.5 million. With nearly 2 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
Overall, TROW ranks 10th on our list of highest dividend stocks to buy on cash app. While we acknowledge the potential for TROW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TROW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
