May 22, 2024
Investors

Income Investors Should Know That Franklin Resources, Inc. (NYSE:BEN) Goes Ex-Dividend Soon


Franklin Resources, Inc. (NYSE:BEN) is about to trade ex-dividend in the next four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company’s books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Franklin Resources’ shares on or after the 2nd of January will not receive the dividend, which will be paid on the 12th of January.

The company’s next dividend payment will be US$0.31 per share. Last year, in total, the company distributed US$1.20 to shareholders. Calculating the last year’s worth of payments shows that Franklin Resources has a trailing yield of 4.1% on the current share price of $30.18. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Franklin Resources can afford its dividend, and if the dividend could grow.

See our latest analysis for Franklin Resources

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Franklin Resources paid out 70% of its earnings to investors last year, a normal payout level for most businesses.

Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.

Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

NYSE:BEN Historic Dividend December 28th 2023

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it’s a relief to see Franklin Resources earnings per share are up 4.2% per annum over the last five years.

Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Franklin Resources’s dividend payments per share have declined at 1.1% per year on average over the past 10 years, which is uninspiring.

To Sum It Up

From a dividend perspective, should investors buy or avoid Franklin Resources? Franklin Resources has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. We think there are likely better opportunities out there.

So if you want to do more digging on Franklin Resources, you’ll find it worthwhile knowing the risks that this stock faces. Case in point: We’ve spotted 3 warning signs for Franklin Resources you should be aware of.

If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Valuation is complex, but we’re helping make it simple.

Find out whether Franklin Resources is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.



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