Key Takeaways
- T. Rowe Price Group and Prudential Financial yield 5.1% and 5.0%, so $10,000 in either pays $510 or $500 a year today.
- T. Rowe Price grew its dividend 7.1% a year from fiscal 2020 to fiscal 2025, but only 2.4% in fiscal 2025, against 3.8% at Prudential.
- T. Rowe Price’s dividend took 68% of its free cash flow over the 12 months to June 30, 2026, while Prudential’s took 37% of its fiscal 2025 normalized EPS.
- The 10-year answer depends on which growth rate each company can keep up.
Anyone hunting for a 5% dividend yield in financial stocks is going to run into T. Rowe Price Group (TROW) and Prudential Financial (PRU). At 5.1% and 5.0%, their checks start out nearly even.
Their second quarters went in different directions, though. T. Rowe Price reported $6.5 billion of net client outflows in the second quarter of 2026. Prudential’s after-tax adjusted operating income rose to $4.08 a share from $3.58 a year earlier.
So with $10,000 in one of them today, which pays you more over the next 10 years?
| Metric | T. Rowe Price Group (TROW) | Prudential Financial (PRU) |
|---|---|---|
| Dividend yield | 5.1% | 5.0% |
| Annual dividend | $5.20 | $5.60 |
| Dividend growth, fiscal 2020 to 2025 | 7.1% a year | 4.2% a year |
| Dividend growth, fiscal 2025 | 2.4% | 3.8% |
| Coverage, last reported | Cash dividend payout ratio: 68% (TTM to June 30, 2026) | Payout ratio of normalized EPS: 37% (fiscal 2025) |
| Net debt/EBITDA (LTM) | -0.92x | 7.69x |
T. Rowe Price’s raises are slowing
T. Rowe Price’s top line is still growing. Net revenues rose 10.7% to $1.91 billion in the second quarter of 2026 from a year earlier, and adjusted diluted EPS rose to $2.57 from $2.24. But clients keep pulling money from its fundamental active equity funds, and CEO Rob Sharps expects net flows in the second half to be “meaningfully more challenging than the first half.”
That’s the business funding a dividend paid from free cash flow.
Free cash flow peaked at $3.21 billion in fiscal 2021, then fell short of the $1.12 billion dividend bill in fiscal 2023. The cash dividend payout ratio was 123% in fiscal 2023, 90% in fiscal 2024 and 77% in fiscal 2025. Over the 12 months to June 30, 2026, it was 68%: covered, but with a thin cushion.
The latest raise, to $1.30 a share, was its “40th consecutive annual increase in the quarterly dividend.” But dividends per share grew just 2.4% in fiscal 2025, against 7.1% a year from fiscal 2020 to fiscal 2025.
The main risk is more outflows to lower-fee products, which pull its average fee rate down.
Prudential has room to spare
Prudential’s dividend sits on a much wider cushion than T. Rowe Price’s. As an insurer, it’s judged on the share of its normalized EPS that the dividend takes, and that share has stayed modest for a decade.
Dividends per share rose every year on the chart, from $2.80 in fiscal 2016 to $5.40 in fiscal 2025. That held even when normalized EPS fell from $14.58 in fiscal 2021 to $9.46 in fiscal 2022. The payout ratio of normalized EPS peaked at 51% that year and was a comfortable 37% in fiscal 2025.
CFO Yanela del Frias said “we do not expect to change our capital deployment philosophy or priorities,” and a 37% payout gives that plenty of support.
The main risk is in Japan. Prudential expects its sales suspension at Prudential of Japan to cut 2026 pretax adjusted operating income by $525 million to $575 million.
So which dividend wins?
Prudential is the dividend more likely to pay you more over the next 10 years.
On paper, T. Rowe Price wins it: at its 5-year rate of 7.1% a year, $10,000 today would pay about $7,090 over the decade, against about $6,054 from Prudential at 4.2% a year, and Prudential would never catch up.
But T. Rowe Price isn’t raising at that pace now. At each dividend’s fiscal 2025 rise instead, 2.4% for T. Rowe Price and 3.8% for Prudential, Prudential’s income passes T. Rowe Price’s by 2028, and $10,000 in Prudential pays about $5,960 over the 10 years, against about $5,693. T. Rowe Price already sends 68% of its free cash flow out as dividends, and management expects flows to get tougher. I don’t see it getting back to 7% raises soon.
That doesn’t make T. Rowe Price’s dividend shaky. It has more cash than debt, its free cash flow covered the dividend over the last 12 months, and 40 straight annual raises is a streak management clearly values. It’s just that Prudential has more room to keep growing its check, and over 10 years, that growth is what decides it.
Of course, T. Rowe Price’s next report will show whether the second half is as tough as Sharps expects. A turn in its flows would put its faster raises back in play.
So what is Prudential Financial stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
