Franklin Resources Inc.
) announced a special cash dividend of $3.00 per share for its
shareholders. This dividend will be paid on December 20, 2012 to
shareholders of record as of December 6.
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The dividend announcement is part of Franklin's long-term
strategy to enhance shareholder value through tactical capital
management. The strategy also includes investment in profitable
businesses while sustaining financial stability and flexibility.
Prior to this announcement, the company paid regular quarterly
dividend of 27 cents per share on October 12, 2012, reflecting
the company's commitment to return value to shareholders with its
strong cash generation capabilities.
The company increased its dividend by 8% (from 25 cents to 27
cents per share) in December 2011. Concurrently, Franklin
announced the payment of special cash dividend of $2.00 per
share. The special dividend was paid in addition to the new
Based in San Mateo, California, Franklin is a global investment
management organization operating as Franklin Templeton
Investments with about $754 billion in assets under management
(AUM). The organization provides a broad array of global and
domestic investment management solutions managed by Franklin,
Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett
Recently, the company declared preliminary AUM of $753.9 billion
by its subsidiaries for the month of October 2012. The company's
results witnessed a rise of 0.5% from $749.9 billion as of
September 30, 2012. Moreover, it bolstered 8.6% from $694.1
billion as of October 31, 2011. Among its peers,
Legg Mason Inc.
) experienced a decline in AUM in October.
On a quarterly basis, as of September 30, 2012, total AUM was
$749.9 billion, up from $707.1 billion as of June 30, 2012,
driven by market appreciation of $40.8 billion and net new flows
of $2.9 billion. Simple monthly average AUM of $726.7 billion
during the quarter climbed 2% sequentially. Net new flows were
$2.9 billion versus $4.8 billion in the prior quarter.
Despite active competition, the company has a significant
long-term upside potential. Based on its disciplined risk-aware
investment approach, Franklin makes investments in the public
equity and fixed income markets across the globe through its
In fiscal 2012 ending September 30, 2012, the company paid
roughly $663 million in dividends to common shareholders. Cash
and cash equivalents along with investments exiting the year were
$10.7 billion. Moreover, the company repurchased common stock
worth $797.4 million during fiscal 2012.
Franklin's global footprint is an exceptionally favorable
strategic point as its AUM is well diversified. The company is
also poised to benefit from its sturdy balance sheet. Moreover,
the recently completed acquisitions are expected to strengthen
its financial results. However, the regulatory restrictions and
sluggish economic recovery could mar the AUM growth and increase
Franklin currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. We believe the announcement of special
dividend will be an appropriate step for the company in boosting
shareholders' confidence, which might lead to positive estimate
revisions. This, in turn, could cause an improvement in the Zacks
Among others, California-based
City National Corporation
) announced a special cash dividend of 25 cents per share, which
will be paid on December 18, 2012 to stockholders of record as on