Dividend Aristocrats Part 12 Of 52: Franklin Resources

Franklin Resources (BEN) manages the Franklin and Templeton families of mutual funds.  The company was founded in 1947 and has paid increasing dividends for 34 consecutive years.

Franklin Resources total returns over the last 20+ years has been nothing short of phenomenal:

BEN Nice Returns

Source:  Franklin Resources 2014 Investor Presentation, slide 36

There are very few stocks that can compete with the profit generating abilities of both Warren Buffett and Steve Jobs – but Franklin Resources has done just that.

The investment management and mutual fund industry has been a very good business for a long time – but…  Growth is beginning to slow for Franklin Resources as the investing industry slowly shifts to low cost providers that don’t charge 1%+ of assets under management.

This article explores Franklin Resources business and the status of its competitive advantage in light of new challenges.

Business Overview

Franklin Resources is well diversified in many different way.  The company’s assets under management are broken down below.

Diversification by asset class:

  • 42% equity
  • 40% fixed income
  • 17% hybrid
  • 1% cash management
  • Geographic diversification:

  • 65% United States
  • 17% Europe, Middle East, & Africa
  • 10% Asia-Pacific
  • 4% Latin America
  • 4% Canada
  • Type of investor diversification:

  • 75% Retail investors
  • 24% Institutional investors
  • 1% High net worth investors
  • Historical Growth & Changing Markets

    Franklin Resources has compounded its earnings-per-share at 11.4% a year over the last decade.  Simply put, the company has realized excellent results over the last 10 years.

    From 1999 through 2007 the company saw even faster growth, compounding earnings-per-share at an amazing 18.2% a year.

    Despite rapid historical growth, the future does not look particularly bright for Franklin Resources.

    Franklin Resources saw assets under management decline 14% and earnings-per-share decline 13% in fiscal 2015.

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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