Dividend Aristocrat Overview: Franklin Resources, Inc.

About Franklin Resources, Inc.

Franklin Resources, Inc. is a global investment manager with offices in 35 countries serving clients in over 150 countries.  Major brands include the Franklin and Templeton series of mutual funds.  The company was formed in 1947 and grew slowly over the next decade.  In 1957, the firm had $2.5 million under management.  Franklin Resources began trading publicly in 1971 and in 1973 acquired the San Mateo, CA based investment management firm Winfield & Company.  That year, with $250 million of assets under management (AUM), Franklin Resources moved from New York to California.  The company continued to grow through acquisitions and organic growth to $2 billion AUM by 1982 and then increased 20-fold, to $40 billion AUM, by 1989.

Franklin Resources had net income of $2.9 billion in 2013, up 16.1% from 2012.  The company’s 2013 revenues were nearly $8 billion, which was an increase of 12.4 % from 2012.  Assets under management were $844.7 billion at the end of 2013, up 12.6% from 2012.  The company currently employs nearly 9,000 employees.

The company is a member of the S&P 500 index, a Fortune 500 company and trades under the ticker symbol BEN.

Franklin Resources’ Dividend and Stock Split History

Franklin Resources has increased dividends annually since 1982 and met the Dividend Aristocrat criteria of 25 straight years of dividend growth in 2006.  Since 1989, Franklin Resources has announced dividend increases in the 4th quarter of the calendar year.  I expect Franklin Resources to announce their next dividend increase in December.

Franklin Resources has a good near term record and an excellent long-term record of dividend growth.  Over the last 5 years (from 2008 – 2013), the company has a compounded annual dividend growth rate (CADGR) of 8.89%.  Over the last 10 years, Franklin Resources has quadrupled its dividend payout, rising from a split-adjusted 10.3 cents per share in 2003 to 41.3 cents in 2013, which translates into a CADGR of 14.87%.  This is consistent with the company’s 20 and 25-year CADGRs of 13.61% and 16.39% respectively.

Franklin Resources quadrupled the per share dividend from 2003 to 2013 - a compounded dividend growth rate of 14.87%.

Franklin Resources quadrupled the per share dividend from 2003 to 2013 – a compounded dividend growth rate of 14.87%.

Since going public in 1971, Franklin Resources has split 11 times.  During the period of rapid expansion in the 1980s, the company split its stock 8 times in 10 years: 2-for-1 in June 1983, 5-for-4 in April 1984, 2-for-1 in March 1985 and January 1986, 3-for-2 in October 1986, 5-for-4 in June 1987, 3-for-2 in December 1989, and 2-for-1 in March 1992.  The company also split the stock 3-for-2 and 2-for-1 in December 1996 and December 1997 respectively.  Most recently, the company split its stock 3-for-1 in July 2013.

Had you purchased 100 shares of Franklin Resources in December 2006 – close to the peak before the stock market crash of 2007 – and when the company met the Dividend Aristocrat criteria of 25 consecutive years of dividend increases, you would have paid about $11,000 and collected a total of $65 in dividends the following year.  That investment would have grown to 300 shares worth a total of about $17,000 – a compounded annual growth rate of 5.2%.  You’d also have collected $124 in dividends in 2013.

Direct Purchase and Dividend Reinvestment Plans

Franklin Resources offers both a direct purchase and dividend reinvestment plan.  If you’re interested in participating in the plans, the minimum initial purchase is $500.  The plan requires new investors to pay a one-time set up fee of $15, along with the regular fees of $5 per purchase plus 10 cents per share if paying by check or $2 per purchase plus 10 cents per share if paying by electronic debit.  If you’re already enrolled in the plans, your minimum investment is $50 (unless, of course, you’re reinvesting dividends).

Franklin Resources pays all fees when reinvesting dividends.

When you go to sell your shares in the plan, you’ll pay 5 cents per share sold.  The only additional fees when selling are a $30 fee if you ask a plan representative to help you and a $25 fee if you need to have the funds wired to your account.  This fee is waived when the proceeds from the sale are directly deposited to your account.

Helpful Links

Franklin Resources Investor Relations Website

Current quote and financial summary for Franklin Resources (finviz.com)

Information on the direct purchase and dividend reinvestment plans for BEN

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.