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Franklin Resources Hikes Dividend 4% Amid Rising AUM

Justin Kuepper Dec 24, 2020

Franklin Resources Inc. (BEN) is a global investment management firm that operates under the Franklin Templeton brand serving clients in over 165 countries. With over 70 years of experience, the company has offices in more than 30 countries with about 1,300 investment professionals who manage approximately $1.5 trillion in assets.

The company’s clients consist of 51% retail investors, 42% institutional investors and 2% high net worth investors based primarily (72%) in the United States. About 46% of total assets under management across these groups were fixed income, 31% were equity, 9% were multi-asset, 9% were alternative assets and 5% were cash.

In late-July, the company acquired Legg Mason and its specialist investment managers to grow its footprint and unlock synergies through the cross promotion of investment products across retail and institutional channels around the world.

The company’s fourth-quarter revenue following the acquisition rose by 20.4% to $1.71 billion, beating consensus estimates by $240 million, while its non-GAAP earnings came in at 56 cents per share, missing consensus estimates by 12 cents per share.

Assets on the Rise

Franklin Resources reported a 5.4% increase in assets under management during November thanks to a 12% increase in equity assets that reached $469.3 billion. Since bottoming out in March, the S&P 500 index has soared by more than 65% to all-time record highs, driven by a combination of government stimulus, vaccine hopes and low interest rates elsewhere.

The company hiked its dividend by 3.7% to 28 cents per share in response to the strong fundamentals, which represents a 4.55% forward yield. The dividend is payable on January 15, 2020, to shareholders of record on December 31, 2020.

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