Noah Holdings (NYSE: NOAH) and Franklin Resources (NYSE:BEN) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

41.6% of Noah Holdings shares are held by institutional investors. Comparatively, 45.0% of Franklin Resources shares are held by institutional investors. 21.6% of Franklin Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Noah Holdings and Franklin Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noah Holdings 29.39% 18.42% 11.94%
Franklin Resources 27.30% 13.96% 10.41%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Noah Holdings and Franklin Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noah Holdings 0 0 1 0 3.00
Franklin Resources 3 6 1 0 1.80

Noah Holdings currently has a consensus price target of $29.00, suggesting a potential downside of 1.86%. Franklin Resources has a consensus price target of $42.22, suggesting a potential downside of 2.71%. Given Noah Holdings’ stronger consensus rating and higher possible upside, equities analysts plainly believe Noah Holdings is more favorable than Franklin Resources.

Earnings and Valuation

This table compares Noah Holdings and Franklin Resources’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Noah Holdings $400.55 million 2.93 $120.04 million $1.73 17.08
Franklin Resources $6.39 billion 3.79 $2.31 billion $3.06 14.18

Franklin Resources has higher revenue and earnings than Noah Holdings. Franklin Resources is trading at a lower price-to-earnings ratio than Noah Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

Franklin Resources pays an annual dividend of $0.80 per share and has a dividend yield of 1.8%. Noah Holdings does not pay a dividend. Franklin Resources pays out 26.1% of its earnings in the form of a dividend. Franklin Resources has raised its dividend for 35 consecutive years.

Volatility & Risk

Noah Holdings has a beta of 2.37, meaning that its share price is 137% more volatile than the S&P 500. Comparatively, Franklin Resources has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500.

About Noah Holdings

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

About Franklin Resources

Franklin Resources, Inc. is a holding company. The Company, along with its subsidiaries, operates as Franklin Templeton Investments. It is a global investment management company that provides investment management and related services to retail, institutional and high net-worth clients in jurisdictions around the world. The Company offers its investment products and services under the Franklin, Templeton, Franklin Mutual Series, Franklin Bissett, Fiduciary Trust, Darby, Balanced Equity Management, K2 and LibertyShares brand names. Its products include investment funds and institutional, high net-worth and separately managed accounts (collectively, sponsored investment products (SIPs)). It offers various types of SIPs, such as the United States funds, cross-border funds, local/regional funds, and other managed accounts, alternative investment products and trusts. Its investment funds include the United States-registered funds, non-United States-registered funds and unregistered funds.

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