Franklin Resources Inc. BEN hiked its quarterly common stock dividend by 4% to 27 cents per share. The new dividend will be paid on Jan 10, 2020, to shareholders of record as of Dec 31, 2019.
Prior to this hike, the company had raised its dividend by 13% to 26 cents per share last December.
The company has been raising dividends annually since almost the last four decades now. The latest move reflects its commitment toward returning value to shareholders with its strong cash-generation capabilities.
Such capital-deployment activities are part of Franklin’s long-term strategy to boost shareholder value. It also includes investments 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 $692.6 billion in assets under management (AUM) as of Sep 30, 2019. The organization provides an array of global and domestic investment management solutions.
Considering last day’s closing price of $25.93 per share, the dividend yield currently stands at 4.2%.
Franklin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in this stock can have a look at its fundamentals listed below.
Expense Management: Though the company recorded a 2% rise in operating expenses in fiscal 2018 on potential investments in the technology, expenses remained stable in fiscal 2019. Further, it recorded a 7%, 14%, and 3% decline in operating expenses in fiscal 2015, 2016 and 2017, respectively.
Leverage: Franklin’s debt/equity ratio currently stands at 0.07, lower than the industry average of 0.29. This reflects the company’s lower debt burden than its peers and highlights sound financial flexibility.
Earnings Growth: In the last three-five years, the company’s earnings have witnessed a decline of 4.9%. However, this trend is expected to reverse in the near term as reflected by its projected earnings per share (EPS) growth rates of 1.6% for fiscal 2020 and 1.2% for fiscal 2021.
Moreover, the company’s long-term (three-five years) estimated EPS growth rate of 7% promises reward for investors.
Share Price Movement: Franklin’s shares have lost 12.6% so far this year as against 9.3% growth recorded by the industry.
Some other finance stocks that raised their dividends during the past three months, include Bank OZK OZK, Eaton Vance Corp. EV and Glacier Bancorp, Inc. GBCI. Bank OZK raised its quarterly dividend by 4.17%, while Eaton Vance increased its dividend by 7.1%. Glacier Bancorp announced a 7.41% rise in its common stock dividend.
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