On Tuesday, Franklin Resources Inc. BEN hiked its quarterly common stock dividend by 20% from the prior quarter payout to 18 cents per share. The new dividend will be paid on Jan 13, 2016 to shareholders of record as of Dec 29, 2015.
The latest move is Franklin’s 36th consecutive dividend increase. This reflects the company’s commitment to return value to shareholders with its strong cash generation capabilities. Prior to this, the company increased its dividend by 25% to 15 cents per share in December 2014.
Such capital deployment activities are part of Franklin’s long-term strategy to enhance shareholder value. The strategy also includes investment in profitable businesses while sustaining financial stability and flexibility.
Based in San Mateo, CA, Franklin is a global investment management organization operating as Franklin Templeton Investments with about $790 billion in assets under management (AUM). The organization provides an array of global and domestic investment management solutions under 7 brands: Franklin Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2.
Despite stiff market competition, Franklin has significant long-term upside potential. Based on its disciplined and cautious approach, Franklin makes investments in the public equity and fixed income markets across the globe through its subsidiaries.
In the fiscal year ended Sep 30, 2015, the company paid roughly $666.4 million in common stock dividends to shareholders. Cash and cash equivalents, along with investments at the end of the period were $10.3 billion. Moreover, the company repurchased common stock worth $1.06 billion in the same period.
Earlier this month, the company declared preliminary AUM of $790 billion by its subsidiaries for November 2015. The company’s results exhibited a 2% fall from $801.1 billion as of Oct 31, 2015. Moreover, it declined 13% from $899.5 billion as of Nov 30, 2014.
Franklin's global footprint is an exceptionally favorable strategic point as its AUM is well diversified. The company is also poised to benefit from its strong balance sheet. We believe though the announcement of a dividend increase will augur well for the company and help boost shareholders’ confidence, regulatory restrictions and sluggish economic recovery could limit AUM growth and increase costs.
Franklin currently carries a Zacks Rank #3 (Hold). Some better-ranked investment managers include AllianceBernstein Holding L.P. AB, Federated Investors, Inc. FII and Woori Bank Co., Ltd. WF. All three carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment