Critical Review: Franklin Resources (BEN) versus Its Rivals

Franklin Resources (NYSE:BEN) is one of 1,744 publicly-traded companies in the “Capital Markets” industry, but how does it weigh in compared to its rivals? We will compare Franklin Resources to related companies based on the strength of its earnings, valuation, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current recommendations for Franklin Resources and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	1	6	4	0	2.27
Franklin Resources Competitors	5551	20122	22458	642	2.37

Franklin Resources currently has a consensus price target of $35.89, suggesting a potential upside of 11.37%. As a group, “Capital Markets” companies have a potential upside of 24.54%. Given Franklin Resources’ rivals stronger consensus rating and higher probable upside, analysts plainly believe Franklin Resources has less favorable growth aspects than its rivals.

Earnings and Valuation

This table compares Franklin Resources and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Franklin Resources	$8.77 billion	$524.90 million	21.92
Franklin Resources Competitors	$5.22 billion	$399.10 million	17.50

Franklin Resources has higher revenue and earnings than its rivals. Franklin Resources is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

Franklin Resources has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Franklin Resources’ rivals have a beta of 0.82, meaning that their average share price is 18% less volatile than the S&P 500.

Profitability

This table compares Franklin Resources and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Resources	8.72%	11.55%	4.46%
Franklin Resources Competitors	318.34%	79.19%	3.72%

Insider and Institutional Ownership

47.6% of Franklin Resources shares are held by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are held by institutional investors. 23.4% of Franklin Resources shares are held by company insiders. Comparatively, 13.0% of shares of all “Capital Markets” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.1%. Franklin Resources pays out 89.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 30.0% of their earnings in the form of a dividend. Franklin Resources has raised its dividend for 45 consecutive years.

Summary

Franklin Resources beats its rivals on 8 of the 15 factors compared.

About Franklin Resources

Franklin Resources, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, institutions, pension plans, trusts, and partnerships. It launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries. The firm invests in the public equity, fixed income, and alternative markets. Franklin Resources, Inc. was founded in 1947 and is based in San Mateo, California with an additional office in Calgary, Canada; Dubai, United Arab Emirates; Edinburgh, United Kingdom; Fort Lauderdale, United States; Hyderabad, India; London, United Kingdom; Rancho Cordova, United states; Shanghai, China; Singapore; Stamford, United States; and Vienna, Austria.