On Tuesday, Franklin Resources Inc.BEN hiked its quarterly common stock dividend by 11% from the prior-quarter payout to 20 cents per share. The new dividend will be paid on Jan 13, 2017 to shareholders of record as of Dec 30, 2016.
The latest move is Franklin's 37th 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 20% to 18 cents per share in Dec 2015.
Such capital deployment activities are part of Franklin's long-term strategy to enhance shareholder value. The strategy 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 $714 billion in assets under management (AUM). The organization provides an array of global and domestic investment management solutions under seven brands: Franklin Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2.
Despite intense market competition, Franklin has significant long-term upside potential. Based on its disciplined and cautious approach, the company makes investments in public equity and fixed income markets across the globe through its subsidiaries.
In the fiscal year ended Sep 30, 2016, the company paid roughly $408.7 million in common stock dividends to shareholders. Cash and cash equivalents, along with investments at the end of the period were $10.7 billion. Moreover, the company repurchased common stock worth $1.32 billion during the same period.
Earlier this month, the company declared preliminary AUM of $714.4 billion by its subsidiaries for Nov 2016. This is down roughly 1.2% from $723.0 billion as of Oct 31, 2016 and nearly 9.6% from $790.0 billion as of Nov 30, 2015.
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 robust balance sheet. We believe that though the announcement of a dividend hike will augur well for the company and help boost shareholders' confidence, regulatory restrictions and sluggish economic recovery could limit AUM growth and increase costs.
Moreover, investors' optimism was visible in the share price movement. Franklin's shares with 8.6% growth in price have outperformed the Zacks categorized investment management industry reflecting 7.0% growth rate year to date.
Franklin currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Virtus Investment Partners, Inc.VRTS has been witnessing upward estimate revisions for the last 60 days. Further, the stock has climbed over 1.6% so far, this year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Woori Bank Co., Ltd.WF has been witnessing stable estimates for the last 30 days. The company's shares have surged nearly 54.2% so far, this year. It currently sports a Zacks Rank #1.
Lazard Ltd.LAZ has been witnessing upward estimate revisions for the last 60 days. Also, the company's shares have risen nearly 29.4% over the last six months. It currently carries a Zacks Rank #2 (Buy).
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks - absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>