Back to top

Image: Bigstock

Should Value Investors Buy Franklin Resources (BEN) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Franklin Resources (BEN - Free Report) is a stock many investors are watching right now. BEN is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 9.99, which compares to its industry's average of 12.75. Over the past year, BEN's Forward P/E has been as high as 12.82 and as low as 6.66, with a median of 10.21.

Investors will also notice that BEN has a PEG ratio of 0.76. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BEN's PEG compares to its industry's average PEG of 1.31. BEN's PEG has been as high as 1.81 and as low as 0.67, with a median of 1.45, all within the past year.

Another notable valuation metric for BEN is its P/B ratio of 0.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.84. BEN's P/B has been as high as 1.69 and as low as 0.70, with a median of 1.23, over the past year.

Finally, we should also recognize that BEN has a P/CF ratio of 8.42. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BEN's current P/CF looks attractive when compared to its industry's average P/CF of 17.67. Within the past 12 months, BEN's P/CF has been as high as 11.45 and as low as 5.21, with a median of 8.88.

These are just a handful of the figures considered in Franklin Resources's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BEN is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Franklin Resources, Inc. (BEN) - free report >>

Published in