Franklin Resources Inc (NYSE:BEN)(Trend analysis) is a company worth to look into from a fundamental point of view. Indeed the company has a return on equity of 20.3% compared to 9.1% for the Financial sector. You can also note that earnings per share (EPS) has grown by 21.5% on average for the last 5 years, indicative of consistent growth in earnings.
The price-earnings ratio of Franklin Resources Inc (NYSE:BEN) stands at 13.34, which is lower than the sector average of 18.1, a good point for the company. Indeed it is better to compare price-earnings ratio to the sector P/E as this ratio can change significantly from one sector to another, making the comparison less relevant.
Also it is interesting to look into the ratio of debt to equity ratio to check if the company is not too much reliant on the outside funding to finance its growth. Franklin Resources Inc (BEN) has a debt to equity ratio of 18% which is a reasonable figure and is below the Financial sector sector average of 178.2%. The company has a current ratio of 7.84. This ratio should be higher than one (ideally two) and is an indicator to show if the company is able to finance its short term obligations. Indeed it should have higher short term assets to dispose in order to cover for its short term liabilities.
For reference, it is important to look at these two ratios as important debt can lead to artificially high profitability ratios and company can get into trouble when a drop in sales occurs and/or higher financing costs when interest rate go upwards.
From an income perspective, Franklin Resources Inc (BEN) has a dividend yield of 1.2%. The dividend growth rate has evolved at the pace of 14.7% over the last 5 years and the payout ratio stands at 27%.
BEN has a Market Cap of $31.62 billion. The company’s stock year-to-date performance is in negative territory, at -7.41%. Franklin Resources Inc (BEN) reported last quarter earnings on April 29. The Invest Management & Advisory Services company announced earnings per share of $0.98 against a consensus Street estimate of $0.85, beating the average estimate by $0.13. This corresponds to a decrease of $0.04 compared to the same quarter of the previous fiscal year.
Is this a Buying Opportunity? Click here for a free Trend Analysis Report
There are currently eighteen analysts that cover Franklin Resources Inc stock. Of those eighteen, three have a Buy rating, fifteen have a Hold rating. On a consensus basis this yields to a Hold rating. The consensus target price stands at $56.44.
A recent analyst activity consisted of Piper Jaffray who initiated their coverage on the stock with Neutral rating on June 3. Piper Jaffray fixed their price target at $59. This corresponds to a 15.41% upside from the last closing price. On the date of report, the stock closed at $51.12.
Another research firm was Barclays who reiterated their Equal-weight stance on May 8. Barclays decreased price target from $52 to $50. This translates to a 2.19% downside from the last closing price. On the date of report, the stock closed at $52.29.
Franklin Resources, Inc. (d.b.a. Franklin Templeton Investments) provides investment advisory services to mutual fund, retirement, institutional/separate accounts and high net worth investors. The Company manages various asset classes including global equity, global institutional and municipal fixed income, money funds, alternative investments, and hedge funds.