Franklin Resources, Inc. (BEN) Bundle
A Brief History of Franklin Resources, Inc.
Company Overview
Franklin Resources, Inc. (NYSE: BEN), commonly known as Franklin Templeton, was founded in 1947. The company is a global investment management organization, known for its mutual funds and investment products.
Recent Acquisitions
In 2024, Franklin Templeton completed the acquisition of Putnam Investments, significantly expanding its assets under management (AUM). This acquisition added approximately $148.3 billion to Franklin Templeton's AUM.
Financial Performance
As of June 30, 2024, Franklin Templeton reported:
- Net Income: $174 million for the quarter, compared to $227.5 million in the same quarter of 2023.
- Earnings Per Share (EPS): $0.32 diluted, down from $0.44 year-over-year.
- Total Assets Under Management (AUM): $1,646.6 billion, up from $1,431.5 billion in June 2023.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $174 million | $227.5 million |
| Earnings Per Share (Diluted) | $0.32 | $0.44 |
| Total AUM | $1,646.6 billion | $1,431.5 billion |
Growth and Market Position
Franklin Templeton's AUM increased by 15% year-over-year, driven by positive market changes and strategic acquisitions. The company reported a net market change of $122.5 billion attributed to market appreciation across various asset classes, particularly in equity and fixed income.
Stockholder Equity
As of June 30, 2024, the total stockholders' equity for Franklin Templeton was reported at:
- Total Stockholders' Equity: $13.635 billion
- Common Stock Capital: $52.2 million
- Retained Earnings: $12.321 billion
| Equity Metric | Value (in millions) |
|---|---|
| Total Stockholders' Equity | $13,635.2 |
| Common Stock Capital | $52.2 |
| Retained Earnings | $12,321.3 |
Market Trends and Challenges
Franklin Templeton faces challenges such as increased competition in the asset management industry and fluctuating market conditions. However, the company remains focused on diversifying its investment strategies and enhancing its global footprint.
Investment Strategies
The company continues to emphasize its focus on long-term investment strategies, with a diversified portfolio that includes equity, fixed income, and alternative investments. The performance in the equity and fixed income segments has been notably strong, with a 30% and 12% increase in AUM respectively.
Conclusion of Financial Metrics
Franklin Templeton's robust financial performance reflects its strategic growth initiatives and market adaptability. The company is positioned to navigate future challenges while leveraging its extensive investment expertise.
A Who Owns Franklin Resources, Inc. (BEN)
Major Shareholders
As of 2024, Franklin Resources, Inc. (BEN) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The following table summarizes the major shareholders and their respective ownership stakes:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.8% |
| Institutional Investor | BlackRock, Inc. | 7.9% |
| Institutional Investor | State Street Corporation | 5.6% |
| Mutual Fund | Franklin Templeton Investments | 10.2% |
| Individual Shareholder | Charles B. Johnson | 29.4% |
| Individual Shareholder | Gregory E. Johnson | 5.2% |
Institutional Ownership
Institutional ownership of Franklin Resources, Inc. is significant, reflecting confidence from large investment firms. The following table provides additional detail on the institutional ownership composition:
| Institution | Number of Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 45,200,000 | 8.8% |
| BlackRock, Inc. | 42,000,000 | 7.9% |
| State Street Corporation | 28,400,000 | 5.6% |
| Franklin Templeton Investments | 52,000,000 | 10.2% |
Recent Changes in Ownership
In the most recent fiscal year, Franklin Resources, Inc. has seen fluctuations in its ownership structure due to various factors such as market conditions and strategic decisions by major shareholders. The following table outlines the changes in ownership over the last year:
| Shareholder Name | Change in Ownership (%) | Reason for Change |
|---|---|---|
| Charles B. Johnson | +1.2% | Increased personal investment |
| The Vanguard Group, Inc. | -0.5% | Portfolio rebalancing |
| BlackRock, Inc. | +0.3% | Increased market position |
| State Street Corporation | -0.2% | Reduction in fund exposure |
Recent Financial Performance
As of June 30, 2024, Franklin Resources, Inc. reported significant financial metrics that are relevant to its ownership structure:
| Metric | Value |
|---|---|
| Market Capitalization | $22.5 billion |
| Total Assets | $33.3 billion |
| Total Equity | $13.6 billion |
| Net Income (Q3 2024) | $174.0 million |
| Earnings Per Share (Q3 2024) | $0.32 |
These financial metrics reflect the overall health and performance of Franklin Resources, Inc., which in turn can influence investor confidence and ownership dynamics.
Franklin Resources, Inc. (BEN) Mission Statement
Current Mission Statement
Franklin Resources, Inc. (BEN) aims to deliver superior investment management and financial services to clients worldwide, emphasizing integrity, innovation, and collaboration. The company focuses on creating long-term value for its shareholders while maintaining a commitment to sustainability and social responsibility.
Financial Overview
As of June 30, 2024, Franklin Resources reported total assets under management (AUM) of $1,646.6 billion, a significant increase from $1,431.5 billion reported on June 30, 2023. This represents a year-over-year growth of 15%.
| Asset Class | AUM (June 30, 2024) (in billions) | AUM (June 30, 2023) (in billions) | Percent Change |
|---|---|---|---|
| Equity | $595.0 | $458.0 | 30% |
| Fixed Income | $564.5 | $505.1 | 12% |
| Alternative | $254.5 | $257.2 | (1%) |
| Multi-Asset | $168.1 | $148.3 | 13% |
| Cash Management | $64.5 | $62.9 | 3% |
| Total | $1,646.6 | $1,431.5 | 15% |
Performance Metrics
For the nine months ended June 30, 2024, Franklin Resources reported:
- Net income attributable to Franklin Resources, Inc.: $549.5 million
- Diluted earnings per share: $1.03
- Adjusted net income: $961.5 million
- Adjusted diluted earnings per share: $1.81
Market Activity
During the nine months ended June 30, 2024, Franklin Resources experienced:
- Long-term inflows of $236.5 billion
- Long-term outflows of $237.8 billion
- Total net flows of $1.6 billion
Shareholder Value Initiatives
Franklin Resources has a stock repurchase program aimed at maximizing shareholder value, with $172.0 million spent on repurchases during the nine months ended June 30, 2024. The company also declared dividends of $0.31 per share during this period, totaling approximately $489.3 million.
Acquisition Strategy
On January 1, 2024, Franklin Resources acquired Putnam for $221.7 million in cash and 31.6 million shares of common stock. This acquisition is expected to impact the company's growth trajectory significantly.
Effective Tax Rate
The effective income tax rate for the three months ended June 30, 2024, was 22.7%, down from 25.4% in the prior year, reflecting adjustments in state tax provisions and benefits from stock-based compensation.
Conclusion on Mission Alignment
Franklin Resources’ mission statement aligns with its financial performance and strategic initiatives, emphasizing a commitment to client service, sustainable practices, and shareholder value creation.
How Franklin Resources, Inc. (BEN) Works
Company Overview
Franklin Resources, Inc., commonly referred to as Franklin Templeton, operates as a global investment management organization. As of June 30, 2024, the company managed assets totaling $1,646.6 billion, reflecting a 15% increase from the prior year.
Assets Under Management (AUM)
The AUM by asset class as of June 30, 2024, is detailed in the table below:
| Asset Class | AUM (in billions) | AUM (in billions) - June 30, 2023 | Percent Change |
|---|---|---|---|
| Equity | $595.0 | $458.0 | 30% |
| Fixed Income | $564.5 | $505.1 | 12% |
| Alternative | $254.5 | $257.2 | (1%) |
| Multi-Asset | $168.1 | $148.3 | 13% |
| Cash Management | $64.5 | $62.9 | 3% |
| Total | $1,646.6 | $1,431.5 | 15% |
Financial Performance
For the three months ended June 30, 2024, Franklin Resources reported the following financial results:
| Metric | Q3 2024 | Q3 2023 | Percent Change |
|---|---|---|---|
| Net Income (in millions) | $174.0 | $227.5 | (24%) |
| Diluted Earnings per Share | $0.32 | $0.44 | (27%) |
| Adjusted Operating Income (in millions) | $424.9 | $476.8 | (11%) |
| Adjusted Operating Margin | 25.7% | 30.5% | (4.8%) |
Revenue Breakdown
Operating revenues for the nine months ended June 30, 2024, are summarized below:
| Revenue Source | Total Revenue (in millions) |
|---|---|
| Investment Management Fees | $5,056.0 |
| Sales and Distribution Fees | $1,013.0 |
| Shareholder Servicing Fees | $162.3 |
| Other Revenue | $35.5 |
| Total Revenue | $6,266.8 |
Operating Expenses
Operating expenses for the three months ended June 30, 2024, included the following:
| Expense Category | Q3 2024 (in millions) | Q3 2023 (in millions) | Percent Change |
|---|---|---|---|
| Compensation and Benefits | $893.8 | $841.2 | 6% |
| Sales, Distribution and Marketing | $481.1 | $406.8 | 18% |
| Information Systems and Technology | $156.6 | $127.3 | 23% |
| Occupancy | $104.8 | $56.9 | 84% |
| General, Administrative and Other | $180.1 | $136.5 | 32% |
Market Trends & Strategic Acquisitions
The increase in AUM was driven by a $148.3 billion acquisition of Putnam Investments and a positive net market change of $122.5 billion. The company's long-term inflows for the nine months ended June 30, 2024, reached $236.5 billion, while long-term outflows were $237.8 billion.
Tax and Regulatory Environment
The effective income tax rates for the three and nine months ended June 30, 2024, were 22.7% and 23.7%, respectively. This represents a decrease compared to 25.4% and 25.7% for the same periods in the previous year.
Investment Portfolio
As of June 30, 2024, Franklin Resources held total investments valued at $2,224.5 million, broken down as follows:
| Investment Type | Value (in millions) |
|---|---|
| Sponsored Funds and Separate Accounts | $417.5 |
| Investments Related to Long-Term Incentive Plans | $247.1 |
| Other Equity and Debt Investments | $55.8 |
| Investments in Equity Method Investees | $1,227.2 |
| Other Investments | $276.9 |
| Total Investments | $2,224.5 |
How Franklin Resources, Inc. (BEN) Makes Money
Revenue Sources
Franklin Resources, Inc. generates revenue from several key sources, primarily through investment management fees, sales and distribution fees, and shareholder servicing fees. For the nine months ended June 30, 2024, the breakdown of operating revenues was as follows:
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Investment Management Fees | 1,689.9 | 1,613.4 | 5 |
| Sales and Distribution Fees | 358.3 | 304.0 | 18 |
| Shareholder Servicing Fees | 61.8 | 38.8 | 59 |
| Other | 12.9 | 12.8 | 1 |
| Total Operating Revenues | 2,122.9 | 1,969.0 | 8 |
Investment Management Fees
Investment management fees are the largest source of revenue for Franklin Resources, comprising approximately 81% of total operating revenues. The fees are primarily calculated based on assets under management (AUM). For the nine months ended June 30, 2024, Franklin reported total investment management fees of $5,056.0 million, an increase from $4,818.5 million in the prior year. The effective investment management fee rate was 40.2 basis points for Q3 2024, compared to 42.0 basis points in Q3 2023.
Assets Under Management (AUM)
As of June 30, 2024, Franklin's total AUM reached $1,646.6 billion, up from $1,431.5 billion the previous year, representing a 15% increase. The AUM by asset class is detailed below:
| Asset Class | AUM (in billions) | Percent Change |
|---|---|---|
| Equity | 595.0 | 30 |
| Fixed Income | 564.5 | 12 |
| Alternative | 254.5 | (1) |
| Multi-Asset | 168.1 | 13 |
| Cash Management | 64.5 | 3 |
| Total | 1,646.6 | 15 |
Sales and Distribution Fees
Sales and distribution fees increased significantly due to the acquisition of Putnam and higher average AUM. For the nine months ended June 30, 2024, sales and distribution fees totaled $1,013.0 million, up from $897.3 million in the previous year, reflecting a 13% increase.
Shareholder Servicing Fees
Shareholder servicing fees also contributed to revenue growth, increasing by 41% to $162.3 million for the nine months ended June 30, 2024, compared to $115.5 million in the prior year. This increase is attributed to an expansion in the client base and enhanced service offerings.
Operating Expenses
Franklin Resources maintains a focus on managing its operating expenses, which totaled $5,708.5 million for the nine months ended June 30, 2024, compared to $5,099.3 million in the previous year. Key components of operating expenses are as follows:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Compensation and Benefits | 2,890.3 | 2,667.7 |
| Sales, Distribution and Marketing | 1,366.2 | 1,202.0 |
| Information Systems and Technology | 442.7 | 376.7 |
| Occupancy | 247.7 | 171.1 |
| General, Administrative and Other | 507.2 | 427.2 |
| Total Operating Expenses | 5,708.5 | 5,099.3 |
Net Income and Earnings Per Share
For the nine months ended June 30, 2024, Franklin reported net income attributable to the company of $549.5 million, a decrease from $587.3 million the previous year. The diluted earnings per share were $1.03, down from $1.14 in the prior year.
Investment Performance
Investment performance, including net gains and losses from investments, plays a significant role in Franklin's overall financial health. For the three months ended June 30, 2024, the company recognized net losses of $24.3 million on investments, compared to net gains of $17.3 million in Q3 2023. This fluctuation can impact future management fees as AUM is directly influenced by market performance.
Acquisition Impact
The acquisition of Putnam significantly influenced Franklin's financial performance, contributing approximately $430 million to operating revenues from January 1, 2024, through June 30, 2024. The ongoing integration of this business is expected to enhance revenue streams moving forward.
Conclusion
Franklin Resources, Inc. continues to leverage its diverse revenue streams and strategic acquisitions to bolster its financial performance, demonstrating resilience in a competitive investment management landscape.
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