On Tuesday, Franklin Resources Inc. BEN hiked its quarterly common stock dividend by 13% from the prior-quarter payout to 26 cents per share. The new dividend will be paid on Jan 11, 2019, to shareholders of record as of Dec 31, 2018.
The latest move is Franklin’s 39th consecutive dividend increase. This reflects the company’s commitment to return value to shareholders with its strong cash-generation capabilities. Prior to this, the company had raised its dividend by 15% to 23 cents per share in December 2017.
Such capital-deployment activities are part of Franklin’s long-term strategy to boost shareholder value. It also includes investment in profitable businesses, while sustaining financial stability and flexibility.
Based in San Mateo, CA, Franklin is a global investment management organization operating as Franklin Templeton Investments with about $683 billion in assets under management (AUM). The organization provides an array of global and domestic investment management solutions.
Earlier this week, the company reported preliminary AUM of $683.3 billion for November 2018. Results display marginal rise from $682.7 billion recorded as of Oct 31, 2018. Net market gains, partially offset by net outflows led to the increase. However, the figure dipped 9.3% year over year.
Considering Tuesday’s closing price of $31.54 per share, the dividend yield is currently valued at 3.3%.
Investors interested in this Zacks Rank #3 (Hold) stock can have a look at the asset manager’s fundamentals and growth opportunities. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prudent Expense Management: Though the company recorded 2% rise in operating expenses in fiscal 2018 on potential investments in the technology, it recorded 7%, 14%, and 3% decline in operating expenses in fiscals 2015, 2016 and 2017. In addition, in first-quarter fiscal 2019, management expects a drop in expenses due to information systems and technology and general, administrative and other expenses, which experience some seasonality.
Leverage: Franklin’s debt/equity ratio comes in at 0.07 against the industry average of 0.17, reflecting lower debt burden. It highlights the company’s sound financial flexibility.
Superior Return on Equity (ROE): Franklin’s ROE of 16.26%, as compared with the industry average of 13.88%, indicates the company’s commendable position over its peers.
Share Price Movement: Franklin’s shares have gained 0.7% in the past three months as against the 16.8% decline recorded by the industry.
Some other finance stocks which have raised their dividends during the current quarter include Eaton Vance Corp. EV, Associated Banc-Corp ASB and Raymond James Financial, Inc. RJF. Eaton Vance raised its quarterly dividend by 12.9%, while Raymond James increased by 13.3%. Also, Associated Banc-Corp has announced a 13.3% rise in common stock dividend.
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