On Jun 16, 2014, we issued an updated research report on
Franklin Resources Inc.
). This California-based investment management company has
exhibited efficient efforts in boosting its organic growth with
increasing assets under management (:AUM) amid a competitive
environment in the industry.
AUM recorded consecutive growth in the first 2 months of
third-quarter fiscal 2014, followed by an 8.0% year-over-year
increase during the first half of fiscal 2014. Driven by market
appreciation and net new inflows, Franklin's AUM recorded a 5-year
(fiscal 2009-fiscal 2013) CAGR of 12.70%. Given such an impressive
performance record, we expect the uptrend to follow in the upcoming
quarters as markets are improving, though at a sluggish pace.
Further, we remain encouraged owing to Franklin's efforts in
enhancing shareholder value. During the first half of fiscal 2014,
the company returned over $455.8 million to the shareholders
through dividends and share repurchases. The company has hiked its
dividend every year since its inception in 1981 with the latest
hike of 20% in Dec 2013.
Despite these positives, we believe there are certain concerns that
may pose threats to the company's financials in the near term.
These include escalating operating expenses and the prevailing
stringent regulatory landscape.
Further, over the past 60 days, the Zacks Consensus Estimate
declined nearly 1% to $3.74 per share for fiscal 2014. Also, for
fiscal 2015, it declined 1.9% to $4.08 per share.
Franklin currently carries a Zacks Rank #3 (Hold).
Cohen & Steers Inc.
Woori Finance Holdings Co., Ltd.
Ameriprise Financial, Inc.
) are better-ranked stocks in this space. Both Cohen & Steers
and Woori Finance sport a Zacks Rank #1 (Strong Buy) while
Ameriprise Financial holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AMERIPRISE FINL (AMP): Free Stock Analysis
FRANKLIN RESOUR (BEN): Free Stock Analysis
WOORI FIN-ADR (WF): Get Free Report
COHEN&STRS INC (CNS): Free Stock Analysis
To read this article on Zacks.com click here.