Franklin's (BEN) Cost Control Efforts On Track: Time To Buy?
Zacks Investment Research | Jun 18, 2017 09:26PM ET
On Jun 16, we issued an updated research report on Franklin Resources, Inc. (NYSE:BEN) . The company has been continuously reducing expenses and enhancing shareholder value. However, the company’s declining assets under management (AUM) keeps us apprehensive.
Franklin’s shares have gained 30.7% over the last one year, outperforming the Zacks categorized Financial - Investment Management industry’s rally of 20.0%.
Moreover, the company’s earnings estimates for fiscal 2017 and fiscal 2018 have been revised 4.0% and 2.5% upward, respectively, in the last 60 days. As a result, the stock currently carries a Zacks Rank #2 (Buy).
The company has successfully implemented cost control measures and reduced expenses in the last two fiscal years. Further, management expects costs to remain at the current level or fall slightly in fiscal 2017.
Also, Franklin is committed to boosting investors’ confidence in the stock through its steady capital deployment measures. The company hiked dividends every year since its inception in 1981, with the latest increase being 11% in Dec 2016. Further, in Jun 2016, it announced an additional repurchase authorization of up to 50 million shares. Such activities reflect its strong liquidity position and capital strength.
However, the company witnessed fall in AUM in fiscal 2016 and first half of fiscal 2017, which led to a decline in investment management fees — its main source of revenues. Though AUM level has risen slightly in the first two months of the current quarter, decline in AUM and revenues in the future can hurt the company’s profitability.
Other Stocks to Consider
Some stocks worth considering in the same space include Lakeland Bancorp, Inc. (NASDAQ:LBAI) , Artisan Partners Asset Management Inc. (NYSE:APAM) and Lazard Ltd. (NYSE:LAZ) . All these stocks hold a Zacks Rank #2. You can see .
Lakeland has witnessed an upward earnings estimate revision of 2.8% for the current year, in the past 60 days. Also, its shares have jumped 75.0%, over the last one year.
Artisan Partners’ earnings estimates have been revised upward by 5.0% for the current year, in the past 60 days. Also, over the last one year, its shares have gained 6.6%.
Lazard has witnessed an upward earnings estimate revision of 3.3% for the current year, in the past 60 days. Its shares have gained 39.4% over the last one year.
Get The News You Want
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.