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Franklin Resources

Franklin Resources (NYSE:BEN) is one of the lesser-known Dividend Aristocrats and is a Dividend Champion. However, investors should keep like this stock. It is one of the large publicly traded asset managers in a consolidating industry. Most other large asset managers are privately held, like Vanguard and Fidelity. The firm is a survivor, and it actively returns cash to shareholders and is undervalued. The forward dividend yield is now roughly 4.2% and covered with a conservative payout ratio of ~30%. The dividend is growing and has been raised for 42 consecutive years. The stock price is down about (-17%) year-to-date it is trading at a low valuation of approximately 7.5 times forward consensus earnings. The combination of high dividend yield and low valuation means it is time to buy Franklin Resources.

Overview of Franklin Resources

Franklin Resources was founded in 1947 by Rupert Johnson, Sr. Today, Franklin Resources is a leading asset manager offering equity, fixed income, and international mutual funds to retail investors and institutions. The firm’s top brands are well-known, including Franklin Templeton, Brandywine, Western Asset Management, Clarion, Martin Currie, and Royce.

At the end of Q1 FY 2022, it had $1.578 trillion assets under management (AUM). The AUM was divided into 40% fixed income, 36% equity, 10% alternative, 10% multi-asset, and 4% cash. Client type was 53% retail, 45% institutional, and 2% high net worth. Reportedly, the company’s funds outperform most of its peers and benchmarks over longer periods.

The Johnson family still controls the firm, and family members are the Chairman of the Board, Vice-Chairman, and Chief Executive Officer. The family owns about 40% of the stock.

Total revenue was $8,425.5 million in fiscal 2021 (fiscal year ends on September 30th) and $8,654.4 million in the past 12 months.

Revenue and Earnings Growth

Franklin Resources faces challenges in generating revenue and earnings growth in a very competitive industry. In the past decade, revenue peaked in 2014 and started a multi-year decline…

Please read the complete article at my profile on Seeking Alpha for Franklin Resources: Time to Buy.

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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.

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