May 24, 2025 a 07:46 am
BEN: Dividend Analysis - Franklin Resources, Inc.
Franklin Resources, Inc., renowned for its robust dividend history, has managed to maintain a solid dividend yield near 5.9%, reflecting its commitment to returning value to shareholders. With over four decades of consistent dividend payments, its reputation is further bolstered by strategic financial management despite current challenges. Investors may find its EPS payout ratio concerning at over 164%, but the company's long-standing dividend track record may bring confidence. This analysis offers a comprehensive breakdown of Franklin Resources’ dividend and financial standings to help investors make informed decisions.
Overview 📊
Franklin Resources operates in the Financial Services sector and presents a compelling dividend profile with a yield of 5.90%. Remarkably, the company boasts 42 years of uninterrupted dividend history, exemplifying its resolute shareholder return strategy. However, the last dividend cut or suspension records no recent activity, signaling sustainability.
| Metric | Details |
|---|---|
| Sector | Financial Services |
| Dividend Yield | 5.90% |
| Current Dividend Per Share | $1.29 |
| Dividend History | 42 years |
| Last Cut or Suspension | None |
Dividend History 📈
The remarkable consistency over the years is a testament to Franklin Resources' commitment to rewarding its shareholders. The historical payout stability underscores investor confidence and provides a foundation for financial growth analysis.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | $0.64 |
| 2024 | $1.56 |
| 2023 | $0.90 |
| 2022 | $1.17 |
| 2021 | $1.13 |
Dividend Growth 📈
Understanding Franklin Resources' dividend growth is crucial for assessing its potential as a long-term investment. Over the past three years, the dividend has grown by 11.35%, while the last five years have seen an 8.24% increase. Such data reflect potential for consistent returns for investors.
| Time | Growth |
|---|---|
| 3 years | 11.35% |
| 5 years | 8.24% |
The average dividend growth is 8.24% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 📉
The payout ratio provides insight into Franklin Resources' earnings distribution policy. A high EPS-based payout ratio of 164.87% and an FCF-based payout of 103.79% raise questions about sustainability if earnings pressure persists. Close monitoring is advised.
| Key Figure Ratio | Percentage |
|---|---|
| EPS-based | 164.87% |
| Free cash flow-based | 103.79% |
The high EPS payout ratio is concerning and suggests that dividends are being paid out more than the earnings, which may not be sustainable in the long term.
Cashflow & Capital Efficiency 💰
Franklin Resources' cash flow management showcases its operational efficiency and capability to fund dividends. The evaluation incorporates free cash flow yield and earnings yield, essential metrics for understanding liquidity and return potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 7.74% | 8.22% | 17.75% |
| Earnings Yield | 4.53% | 7.33% | 12.28% |
| CAPEX to Operating Cash Flow | 18.23% | 13.07% | 4.61% |
| Stock-based Compensation to Revenue | 2.90% | 2.75% | 2.52% |
| Free Cash Flow / Operating Cash Flow Ratio | 81.77% | 86.93% | 95.39% |
Franklin Resources demonstrates robust cash flow efficiency with a high free cash flow yield, signifying strong dividend coverage potential and operational resilience.
Balance Sheet & Leverage Analysis 📊
The balance sheet metrics reveal Franklin Resources' leverage and financial stability. Continued diligence in maintaining favorable ratios contributes to operational credibility and investment appeal.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.046 | 0.986 | 0.816 |
| Debt-to-Assets | 0.403 | 0.390 | 0.334 |
| Debt-to-Capital | 0.511 | 0.497 | 0.449 |
| Net Debt to EBITDA | 6.31 | 3.78 | 1.94 |
| Current Ratio | 3.96 | 4.84 | 3.70 |
| Quick Ratio | 3.24 | 4.84 | 3.70 |
| Financial Leverage | 2.60 | 2.53 | 2.45 |
The steady decline in the debt-to-equity ratio alongside supported liquidity ratios underpins the company's manageable debt structure and improves financial stability even amidst leverage challenges.
Fundamental Strength & Profitability 🏆
Analyzing fundamentals such as returns and profit margins elucidates profitability and efficiency. Franklin Resources' strategic oversight is evident through metrics such as return on equity and assets.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 3.72% | 7.41% | 11.26% |
| Return on Assets | 1.43% | 2.93% | 4.60% |
| Return on Invested Capital | 0.98% | 2.34% | 5.18% |
| Net Profit Margin | 5.48% | 11.25% | 15.61% |
| Gross Margin | 46.98% | 55.49% | 40.36% |
| EBIT Margin | 10.86% | 21.19% | 22.08% |
| EBITDA Margin | 16.22% | 24.79% | 28.50% |
| Research & Development to Revenue | 0.0% | 0.0% | 0.0% |
The fundamental analysis showcases Franklin's adept handling of profitability metrics and resource allocation, indicating robust profit generation capability refined over time.
Price Development 📉
Dividend Scoring System ⚖️
| Category | Score | Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Total Score: 30/40
Rating 🗣️
Franklin Resources, Inc. demonstrates formidable dividend metrics, evidenced by impressive history and yield. Yet, the inflated payout ratios signal caution for income-focused investors. The analytical takeaway recommends a sustained watch on financial ratio adjustments to gauge sustainability potential. Prospective investors may find its stable dividend continuity appealing despite potential payout concerns. Thus, Franklin Resources retains a commendable yet cautious investment outlook with moderate dividend attraction for informed stakeholders.