Image source: PexelsT. Rowe Price (TROW) provides a wide array of mutual funds, advisory services, and account management services for individuals and institutions. The company produces about $7.2 billion in annual revenue, trades with a market cap of $24 billion, and has a dividend increase streak of 38 years, putting it in rare company on that measure.T. Rowe Price ended the most recent quarter with about $1.6 trillion in assets under management (AUM). It posted second-quarter earnings on July 26th, 2024 and results were mixed. Revenue was up 7.5% year-on-year to $1.73 billion, but this was $50 million lower than analysts expected. Adjusted earnings-per-share totaled $2.26, which was up from $2.02 a year ago, but again missed expectations of $2.28.AUM improved 1.7%, or $26.9 billion, which was attributable to market appreciation of $30.6 billion, partly offset by $2.6 billion in net client outflows. Operating costs were $1.1 billion, up 3.2% year-over-year, but less than the pace of revenue growth.We see $9.03 in earnings-per-share for this year after Q2 results, another improvement from our prior estimates. We note that T. Rowe and other asset managers need strong equity markets in the U.S., so if we see weak periods in U.S. stocks, AUM could suffer.Competitive Advantages & Recession PerformanceT. Rowe, like other asset managers, doesn’t really have a competitive advantage. The reality is that most asset managers offer basically the same products and services, similar to banking, so competitive advantages are difficult to come by.This means size and scale, and brand loyalty are really more important than most anything else in this business. T. Rowe has longevity and brand recognition, but we note that competitive advantages really end there, and they aren’t significant.Recession performance is weak for asset managers given their inherent leverage to equity markets, so we caution investors that earnings are likely to suffer during prolonged recessions.That said, we believe the company’s dividend increase streak will be able to continue, as its current 38-year streak encompasses several very weak economic periods, and the payout was still raised.Growth Prospects, Valuation & CatalystWe see growth at 3.0% annually going forward, as the company’s ability to boost the bottom line has proven quite limited in recent years. Growth should accrue from gradually rising revenue, and roughly flat profit margins, resulting in our low single-digit estimate.The valuation is compelling today, offering investors a roughly 15% discount to fair value with shares at 11.9 times expected earnings for fiscal 2024 versus our estimated fair value P/E ratio of 14.0.In addition, the stock’s high 4.6% yield is more than triple that of the S&P 500. When combining these factors, we project that T. Rowe Price shares will return 10.0% annually in the coming years.More By This Author:Chubb: An Example Of Why Warren Buffett Loves The Insurance BusinessBlue Chips In Water And Electric PowerCrexendo: Low-Priced, High Potential In The Cloud