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Franklin Resources: Dividend Remains Strong Despite Drop-Off In Growth

Mar. 02, 2021 8:49 AM ETFranklin Resources, Inc. (BEN)3 Comments
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  • Company beats bottom-line estimates in the first quarter.
  • Stronger firm definitely materializing after the acquisition.
  • Dividend to be bolstered by sound balance sheet management and growing earnings.
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If we look at a long-term chart of Franklin Resources (NYSE:BEN), we can see that shares have given a buy signal on the key MACD indicator. This indicator in our opinion is especially prevalent on long-term charts and it is a solid read both on trend as well as momentum. Furthermore, the lower the signal takes place from the “zero” line, the better the buying opportunity due to shares being heavily oversold. Suffice it to say, we would argue this may be presently the most attractive long-term buying opportunity in Franklin for quite some time.

We have followed BEN closely over the past few years for a number of reasons. Firstly, the asset manager is a dividend aristocrat with a very impressive 40-year dividend growth history. Furthermore, as we can see in the chart above, shares of BEN had been making consistent lower lows since late 2014 but during this timeframe, Franklin´s financials as well as its valuation looked very attractive.

The key with investing in a stock like BEN is that one must be prepared to stay the course in the investment for the long haul. We state this because investors for example who maybe bought in early 2015 or late 2017 are most likely still showing a paper-loss on their total investment (Capital gain + dividends) especially if they didn´t reinvest their dividends back into buying more stock. This is probably the biggest drawback with value-investing in that the respective investor many times invests against the underlying trend and may have to wait years on end before their investment finally comes good. Suffice it to say, a long-term mindset as well as buckets of patience are imperative attributes for the dividend growth investor.

The rally though over the past 12 months as well as a number of recent


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Comments (3)

BEN’s yield cannot be assessed without also considering the often large special dividends they occasionally pay out in addition to the regular quarterly on. Actual yield ends up much higher, but it is unpredictable and so hard to quantify.
ARG1 profile picture
I added to my position in BEN today. They sell good products that will be widely appreciated in this market.
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