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April 1, 2000
FUND PROFILE
T. ROWE PRICE
Dividend GrowthFund
A stock fund seeking growing dividend income and long-term capital growth.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.
TROWEPRICELOGO
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1
FUND PROFILE
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What is the fund's objective?
The fund seeks to provide increasing dividend income over time, long-term
growth of capital, and a reasonable level of current income through
investments primarily in dividend-paying stocks.
What is the fund's principal investment strategy?
We will normally invest at least 65% of the fund's total assets in the common
stocks of dividend-paying companies that we expect to increase their
dividends over time and also provide long-term appreciation. T. Rowe Price
believes that a track record of dividend increases is an excellent indicator
of financial health and growth prospects, and that over the long term, income
can contribute significantly to total return. Dividends can also help reduce
the fund's volatility during periods of market turbulence and help offset
losses when stock prices are falling.
Our in-house research team looks for stocks with sustainable, above-average
growth in earnings and dividends, and we attempt to buy them when they are
temporarily out of favor or undervalued by the market. Holdings tend to be in
large to medium-sized companies.
In selecting investments, we favor companies with one or more of the
following:
. either a track record of, or the potential for, above-average earnings and
dividend growth;
. a competitive current dividend yield;
. a sound balance sheet and solid cash flow to support future dividend
increases;
. a sustainable competitive advantage and leading market position; and
. attractive valuations, such as low price/earnings, price/cash flow, or
price/dividend ratios.
While most assets will be invested in U.S. common stocks, other securities
may also be purchased, including foreign stocks, futures, and options, in
keeping with fund objectives.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of any of these documents, call 1-800-638-5660.
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FUND PROFILE
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What are the main risks of investing in the fund?
As with all equity funds, this fund's share price can fall because of
weakness in the broad market, a particular industry, or specific holdings.
The market as a whole can decline for many reasons, including adverse
political or economic developments here or abroad, changes in investor
psychology, or heavy institutional selling. The prospects for an industry or
company may deteriorate because of a variety of factors, including
disappointing earnings or changes in the competitive environment. In
addition, our assessment of companies held in the fund may prove incorrect,
resulting in losses or poor performance even in a rising market. Finally, the
fund's investment approach could fall out of favor with the investing public,
resulting in lagging performance versus other types of stock funds.
The fund's emphasis on dividend-paying companies could result in significant
investments in large-capitalization stocks. At times, stocks such as these
may lag shares of smaller, faster-growing companies. Also, a company may
reduce or eliminate its dividend. The fund's efforts to buy stocks that
appear temporarily out of favor carry the risk that a stock or group of
stocks may remain out of favor for a long time and may continue to decline.
To the extent that the fund invests in foreign stocks, it is also subject to
the risk that some holdings may lose value because of declining foreign
currencies or adverse political or economic events overseas. If the fund uses
futures and options, it is exposed to additional volatility and potential
losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of common stock investments. If you seek
a reasonable level of current income from equity investments that have the
potential to rise faster than inflation, and can accept price fluctuations in
an effort to achieve long-term capital growth, the fund could be an
appropriate part of your overall investment strategy. This fund should not
represent your complete investment program or be used for short-term trading
purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
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3
FUND PROFILE
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How has the fund performed in the past?
The bar chart and the average annual total return table indicate risk by
illustrating how much returns can differ from one year to the next. The
fund's past performance is no guarantee of its future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
LOGO
<TABLE>
<CAPTION>
Calendar Year Total Returns
"93" "94" "95" "96" "97" "98" "99"
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<S> <C> <C> <C> <C> <C> <C>
19.41 2.16 31.75 25.36 30.77 15.04 -2.82
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</TABLE>
Quarter ended Total return
Best quarter 12/31/98 13.05%
Worst quarter 9/30/99 -8.34%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 3/31/00
Since inception
1 year 5 years (12/30/1992)
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<S> <C> <C> <C>
Dividend Growth Fund -0.58% 17.26% 15.96%
S&P 500 Stock Index 17.94 26.76 21.11
Lipper Multi-Cap Value Funds 7.97 16.32 14.08
Average
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</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
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FUND PROFILE
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What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees.
<TABLE>
Table 2 Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
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<S> <C>
Management fee 0.52%/ // /
Other expenses 0.25%
Total annual fund operating 0.77%/ // /
expenses
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</TABLE>
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, you invest $10,000, you earn a 5% annual return, and you hold the
investment for the following periods:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
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<S> <C> <C> <C>
$79 $246 $428 $954
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</TABLE>
Who manages the fund?
The fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
Thomas J. Huber manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since 2000. He joined T. Rowe Price in 1994 as
an investment analyst and has served on the committee since 1998.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50 for
IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
open an account by bank wire, by exchanging from another T. Rowe Price fund,
or by transferring assets from another financial institution.
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FUND PROFILE
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How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
When will I receive income and capital gain distributions?
The fund distributes income quarterly and net capital gains, if any, at
year-end. For regular accounts, income and short-term gains are taxable at
ordinary income rates, and long-term gains are taxable at the capital gains
rate. Distributions are reinvested automatically in additional shares unless
you choose another option, such as receiving a check. Distributions paid to
IRAs and employer-sponsored retirement plans are automatically reinvested.
What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
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FUND PROFILE
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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F58-035
T. Rowe Price Investment Services, Inc., Distributor
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