There are plenty of high dividend yield stocks in the
market. But there are very few high yield stocks with a safe and growing
dividend. Franklin Resources Inc. (BEN) is one of those few high yield stocks
with a safe, high yield dividend that’s growing every year.
This article analyzes high-yield stock Franklin Resources in
detail. While it doesn’t have a 5.0%+ yield currently, its dividend yield of
4.2% is still high, especially in today’s low-interest-rate environment.
Business Overview
Franklin Resources, founded in 1947 and headquartered in San
Mateo, CA, is a global asset manager with a long and successful history. The
company offers investment management and related services to its customers,
including sales, distribution, and shareholder servicing. As of Dec. 31, 2021,
assets under management (AUM) totaled $1.578 trillion. The company has a
current market capitalization of 14.02 billion.
On Feb. 1, 2022, the company reported first-quarter results
for Fiscal Year (FY) 2022. The company fiscal year ends in September. Total
revenue for the quarter was $2,224 million compared to $1,995.1 million in
total revenue the company made in Q1 2021, or an 11% increase.
The investment management fees segment, which is the
company’s primary source of revenue, grew by 14% for the quarter
year-over-year. The sales and distribution fees segment was flat, while the
shareholder servicing fees segment saw a negative growth of 3% year-over-year.
Operating income grew 36% compared to the first quarter of
2021. The reported operating income was $557.7 million compared to $409.1
million a year ago for the same period. This was done even with the increase in
total operating expenses of 5%.
Thus, adjusted net income was $553.6 million, and adjusted
diluted earnings per share was $1.08 for the quarter, compared to $644.6
million and $1.26 for the previous quarter, and $373.4 million and $0.73 for
the quarter ended Dec. 31, 2020. This represents a significant increase of
47.9% compared to the first quarter period.
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