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Are You Looking for a High-Growth Dividend Stock? Franklin Resources (BEN) Could Be a Great Choice
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Franklin Resources in Focus
Based in San Mateo, Franklin Resources (BEN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -4.62%. Currently paying a dividend of $0.27 per share, the company has a dividend yield of 4.52%. In comparison, the Financial - Investment Management industry's yield is 1.61%, while the S&P 500's yield is 1.49%.
In terms of dividend growth, the company's current annualized dividend of $1.12 is up 3.7% from last year. Franklin Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.88%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Franklin Resources's current payout ratio is 41%, meaning it paid out 41% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BEN for this fiscal year. The Zacks Consensus Estimate for 2020 is $2.78 per share, with earnings expected to increase 6.51% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BEN presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? Franklin Resources (BEN) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Franklin Resources in Focus
Based in San Mateo, Franklin Resources (BEN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -4.62%. Currently paying a dividend of $0.27 per share, the company has a dividend yield of 4.52%. In comparison, the Financial - Investment Management industry's yield is 1.61%, while the S&P 500's yield is 1.49%.
In terms of dividend growth, the company's current annualized dividend of $1.12 is up 3.7% from last year. Franklin Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.88%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Franklin Resources's current payout ratio is 41%, meaning it paid out 41% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BEN for this fiscal year. The Zacks Consensus Estimate for 2020 is $2.78 per share, with earnings expected to increase 6.51% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BEN presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).