Analyzing Franklin Resources (BEN) and Its Peers

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

Institutional & Insider 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, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Franklin Resources and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	1	6	4	0	2.27
Franklin Resources Competitors	5534	20094	22421	641	2.37

Franklin Resources currently has a consensus price target of $35.89, indicating a potential upside of 13.36%. As a group, “Capital Markets” companies have a potential upside of 26.91%. Given Franklin Resources’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Franklin Resources has less favorable growth aspects than its competitors.

Risk & Volatility

Franklin Resources has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500. Comparatively, Franklin Resources’ competitors have a beta of 0.81, meaning that their average stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Franklin Resources and its competitors’ 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	304.49%	79.05%	3.65%

Valuation & Earnings

This table compares Franklin Resources and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Franklin Resources	$8.77 billion	$524.90 million	21.54
Franklin Resources Competitors	$2.39 billion	$395.48 million	15.94

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

Dividends

Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.2%. 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 competitors on 8 of the 15 factors compared.

Franklin Resources Company Profile

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.