July 02, 2025 a 07:46 am
BEN: Dividend Analysis - Franklin Resources, Inc.
Franklin Resources, Inc. is a prominent player in the financial sector, known for its consistent dividend payments over the years. With a remarkable 42-year history of uninterrupted dividends, the company demonstrates strong commitment to shareholder returns. However, potential investors should take note of the high payout ratios, suggesting a need for caution regarding sustainability. The firm remains an interesting candidate for those seeking income, but careful analysis of cash flow and capital efficiency is warranted.
📊 Overview
Franklin Resources, Inc. operates within the financial services sector and is characterized by a robust dividend profile.
| Metric | Value |
|---|---|
| Sector | Financial Services |
| Dividend yield | 5.33 % |
| Current dividend per share | 1.29 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
📉 Dividend History
The company's 42-year unbroken history of dividend payments is testament to its solid financial foundation, attracting investors seeking reliable income.
Visual representation of Franklin Resources, Inc.'s dividend history.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.64 |
| 2024 | 1.56 |
| 2023 | 0.90 |
| 2022 | 1.17 |
| 2021 | 1.13 |
📈 Dividend Growth
The dividend growth rates highlight a moderate upward trend which, although steady, might not appeal to investors seeking high growth.
| 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.
Dividend growth trend at Franklin Resources, Inc. over time.
🗣️ Payout Ratio
The payout ratios present a critical assessment of the company's profitability and its capability to maintain dividends without compromising financial health.
| Key figure ratio | Percent |
|---|---|
| EPS-based | 164.87 % |
| Free cash flow-based | 103.79 % |
The payout ratios highlight potential sustainability concerns with high EPS and FCF payout ratios. This suggests dividends might be at risk if earnings don't grow or free cash flow generation isn't improved.
✅ Cashflow & Capital Efficiency
Analyzing cash flow generation and capital efficiency helps to understand the company's capability to reinvest and grow while maintaining healthy payout ratios.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 7.74 % | 8.21 % | 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 % |
With high free cash flow yields and relatively low CAPEX, the company demonstrates strong cash flow efficiency. However, fluctuating earnings yields call for ongoing monitoring.
⚠️ Balance Sheet & Leverage Analysis
Comprehensive leverage and liquidity analysis offers insights into the financial health and potential debt-related risks the company may face.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.05 | 0.99 | 0.82 |
| Debt-to-Assets | 40.31 % | 39.02% | 33.37 % |
| Debt-to-Capital | 51.13 % | 49.65% | 44.93 % |
| Net Debt to EBITDA | 6.31 | 3.78 | 1.94 |
| Current Ratio | 3.24 | 4.84 | 3.70 |
| Quick Ratio | 3.24 | 4.84 | 3.70 |
| Financial Leverage | 2.60 | 2.53 | 2.45 |
The increasing leverage ratios indicate heightened financial risk, but high current and quick ratios reflect healthy short-term liquidity.
📉 Fundamental Strength & Profitability
Understanding the company's profitability and return metrics helps investors gauge its operational efficiency and sustainability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 3.72 % | 7.41 % | 11.26 % |
| Return on Assets | 1.43 % | 2.93 % | 4.60 % |
| Margins: Net | 5.48 % | 11.25 % | 15.61 % |
| EBIT | 10.86 % | 21.19 % | 22.09 % |
| EBITDA | 16.22 % | 24.79 % | 28.50 % |
| Gross | 46.98 % | 55.49 % | 40.36 % |
| Research & Development to Revenue | 0% | 0% | 0% |
Although shrinking over the years, profitability margins and returns remain robust, reflecting solid operational performance.
📈 Price Development
Stock price trend of Franklin Resources, Inc.
🗣️ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 2 | |
| Payout ratio | 1 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Total Score: 26 / 40
✅ Rating
Franklin Resources, Inc. is a stable choice for income-focused investors due to its historically reliable dividends. Although the high payout ratios and moderate growth may deter aggressive growth-seekers, the company offers a solid yield and resilient dividend history. Investors should monitor cash flow and leverage to ensure continued financial stability.