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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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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Franklin Resources in Focus
Headquartered in San Mateo, Franklin Resources (BEN - Free Report) is a Finance stock that has seen a price change of 21.69% so far this year. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.68%. In comparison, the Financial - Investment Management industry's yield is 1.77%, while the S&P 500's yield is 1.3%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 3.7% from last year. In the past five-year period, Franklin Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.19%. Looking ahead, future dividend growth will be dependent on earnings growth and 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 42%. This means it paid out 42% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BEN for this fiscal year. The Zacks Consensus Estimate for 2021 is $3.04 per share, which represents a year-over-year growth rate of 16.48%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that BEN is not only an attractive dividend play, but is also a compelling investment opportunity with a 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
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Franklin Resources in Focus
Headquartered in San Mateo, Franklin Resources (BEN - Free Report) is a Finance stock that has seen a price change of 21.69% so far this year. Currently paying a dividend of $0.28 per share, the company has a dividend yield of 3.68%. In comparison, the Financial - Investment Management industry's yield is 1.77%, while the S&P 500's yield is 1.3%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 3.7% from last year. In the past five-year period, Franklin Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.19%. Looking ahead, future dividend growth will be dependent on earnings growth and 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 42%. This means it paid out 42% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BEN for this fiscal year. The Zacks Consensus Estimate for 2021 is $3.04 per share, which represents a year-over-year growth rate of 16.48%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that BEN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).