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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Franklin Resources, Inc. (XNYS:BEN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BEN
Name:
FRANKLIN RESOURCES, INC. (XNYS:BEN)
Sector:
149.70M
Industry:
Asset Management
CEO:
Mr. Martin Flanagan
Total Employees:
9,800
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1097.28% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FRANKLIN RESOURCES, INC.(BEN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
25.89
One Month Price Target:
$26.06
Six Month Price Target :
$26.94
Likely Price in One Year's Time:
Ticker:
$27.98
Likely Trading Range Today Under (Normal Volatility)
$25.78
Price Upper limit ($) :
$26.02
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$24.45
This week:
$22.67
This month :
$19.46
Other Primary facts
Market Cap:
12.90B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
498.36M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.51%
-13.62%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$32.57
$29.51
$19.21
$22.27
Medium risk (<10%) entry points
Buy Call
Sell Call
$28.52
Buy Put:
Sell Put:
$27.86
$23.26
$23.92
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BEN
Sharpe Ratio:
1.03%
Comparison:
BEN, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 28.20% higher than the industry
& is -54.78% lower than the market/S&P 500 average
Average Returns/Yield of
BEN
Daily returns:
0.04%
Weekly returns:
0.18%
Monthly returns:
0.74%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -3.51% below industry average
Classification:
BEN, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.9
Statistical test of Returns:
BEN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.72%
Weekly Volatility:
6.09%
Monthly Volatility:
12.18%
Yearly Volatility:
42.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.31%
Volatility in last five trading days has been -88.60% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.56%
Weekly VaR:
-12.42%
Monthly VaR:
-24.85%
How Much Can the price of
BEN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-86.07%
This translates to price declining to:
$20.31
This translates to price declining to:
$3.61
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
BEN is a 75.37% riskier investment compared to the market/S&P 500 & is 50.24% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 4.80% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BEN
Beta in relation to market/S&P 500--1.20
Expected beta in 1 year's time:
0.996
Expected beta in 3 year's time:
1.409
Unlevered (debt free) Beta:
0.751
Beta in relation to Nasdaq (XNAS):
0.832
Beta in relation to all global stocks::
0.761
Beta Comparison & Analysis
Beta of competitors/peers::
1.089
Beta is 10.55% higher than peers
Average Industry Beta:
1.694
Beta is -28.96% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.54%
Sustainable growth rate is -55.53% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.025
Alpha is -54.52% below industry average alpha yield
Alpha is -161% below the market average
Analysis of Cost of Capital of
BEN
Equity cost of capital:
0.114
Equity cost of capital is -22.77% below industry mean WACC
Unlevered (without debt) cost of capital:
7.11%
Before-tax cost of debt:
1.02%
After-tax cost of debt:
0.80%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.80%
WACC is 8.26% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$17.37
Revenue growth rate per share of (3Y):
1.06
Annual revenue growth rate is -59.48% below industry average
EPS:
$3.73
Expected Annual growth rate of EPS (3Y):
17.27%
Expected future EPS growth rate is -37.82% lower than the Asset Management industry
Free cash flow (FCF) per share:
$1.83
Balance sheet equity growth per share: -71.00%
Equity growth rate per share is -435.95% lower than the industry
Debt per share
$16.18
EBITDA per share
$5.29
Valuation Analysis Today of
BEN
P/E Ratio:
7.68
P/E Ratio of Competitors/Peers:
119.57
P/E ratio is -93.58% lower than main peers & is -52.47% lower than the industry
Stock price/value with industry average P/E ratio: $60.23
BEN is -57.02% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $67.51
Present value of the expected future dividends only: $10.86
P/S (Price to Sales ratio):
1.49
Price to sales ratio is -78.25% below the industry mean
P/B (Price to book value ratio):
1.06
Price to free cash flow: 14.11
-
Net income growth rate (3Y):
162.79%
Net income growth rate is 11.97% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 7.50%
Dividend yeild: 4.44%
Previous Dividend: $0.29
Previous adjusted dividend: $0.29
Previous Dividend: $1.15
Expected next dividend best case: $0.30
Expected next dividend worst case: $0.28
Average dividend payment (long-term): $0.28
Average dividend increase/decrease (growth rate) % per period: 0.73%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$0.29
2021-12-30--$0.29
2021-06-29--$0.28
2022-03-30--$0.29
2021-09-29--$0.28
2021-03-30--$0.28
Dividend growth rate is -86.78% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
69.80%
Net debt to equity ratio:
30.46%
Debt to assets ratio:
32.26%
Net debt to assets ratio:
14.08%
Debt-to-asset ratio is -38.28% below industry average
Ability to repay debt:
Interest coverage ratio:
32.16
Interest coverage ratio is -45.92% less than industry average
Looking forward:
Debt growth rate:
-12.78%
Annual debt growth is 85% higher than industry average debt growth rate
Debt repayment rate in last quarter: 13.22%
Analysis of Key Statistics
Correlation of price movement with the market:
0.667
Statistical significance of correlation:
BEN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is 15.75% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
0.035
Covariance of price movement with the market:
0.055
Kurtosis
3.567
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.07
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BEN
Gross Profit Margin Ratio:
164%
Operating Profit Margin Ratio:
23.45%
Operating profit margin is -50.15% lower than the industry
Net Profit Margin Ratio:
164%
Effective Tax Rate:
13.73%
Effective tax rate is -43.77% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.51%
Return on equity (ROE) is -34.71% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.63%
Return on assets (ROA) is 30.74% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
2.96
Current ratio is -22.77% below industry average
Cash Conversion Cycle (days):
-21
Cash conversion cycle is -102.41% below industry average
The remaining useful life of property plant & equipment is: 5.5 years
Stock based compensation to net income ratio:
3.12%
In-depth Efficiency Analysis
Revenue generated per employee:
883.6K
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
269.1K
Each employee generates -135% less EBITDA than industry average revenue per employee
Profit generated per employee:
194.6K
Each employee generates -116% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.3K
Each employee generates -113% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.9M
Each employee generates -113% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BEN
ALLY FINANCIAL INC. (XNYS:ALLY)
Markel Corporation (XNYS:MKL)
KB HOME (XNYS:KBH)
SHINHAN FINANCIAL GROUP CO.,LTD (XNYS:SHG)
ALTERITY THERAPEUTICS LIMITED (XASX:ATH)
Barksdale Resources Corp. (XTSX:BRO)
HIG-PG
FIDELITY NATIONAL FINANCIAL, INC. (XNYS:FNF)
-
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�33%
Sell�17%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.66B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.12B
3.54B
-
1.28B
1.28B
-
234.60M
1.51B
3.60M
82.00M
311.10M
2.64B
2.03B
1.91B
2.46B
337.20M
1.91B
Statement of Cash Flow
Date:
Period:
80.70M
Differed Income Tax :
- 34800.00K
Stock Based Compensation :
59.40M
Change in Working Capital :
- 304000.00K
Accounts Receivables:
-
Other Working Capital:
- 273100.00K
Other Non-Cash Items:
- 88100.00K
Net Cash Provided by Operating Activities:
166.40M
Investments in PP&E:
- 16700.00K
Net Acquisitions:
- 372300.00K
Purchases of Investments:
- 1167500.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
4.54B
-
4.54B
1.43B
-
-
5.98B
1.18B
4.72B
4.78B
8.00B
-
323.50M
19.02B
-
25.00B
1.15B
-
866.70M
-
866.70M
2.02B
8.06B
2.50B
10.78B
-
12.80B
50.30M
11.89B
- 389600.0K
-
December 31, 2021 at 12:00:00 AM
6.63B
11.55B
24.35B
-
8.06B
3.5B
824.00M
3.90M
- 728600.00K
- 1228100.00K
-
- 21700.00K
- 143100.00K
1.86B
467.30M
- 8000.00K
- 102900.00K
4.54B
4.65B
166.40M
- 16700.00K
149.70M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
BEN
2023
2024
2025
2026
2027
$28.12
$169.31
$183.00
$197.80
$213.80