Stock Analysis & Valuation Franklin Resources, Inc. (0RT6.L)

• Previous Close: £26.56
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	22.10	-17
Intrinsic value (DCF)	11.16	-58
Graham-Dodd Method		n/a
Graham Formula	11.00	-59

Strategic Investment Analysis

Company Overview

Franklin Resources, Inc. (NYSE: BEN) is a leading global asset management firm headquartered in San Mateo, California, with a strong presence in Hyderabad, India. Founded in 1947, the company operates under the Franklin Templeton brand, offering a diverse range of investment solutions, including equity, fixed income, balanced, and multi-asset mutual funds. Serving individual investors, institutions, pension plans, trusts, and partnerships, Franklin Resources leverages its deep expertise in public equity, fixed income, and alternative markets to deliver tailored financial solutions. As part of the Financial Services sector, the firm competes in the highly dynamic asset management industry, where scale, performance, and global reach are critical. With a market capitalization exceeding $11 billion, Franklin Resources remains a key player in wealth management, known for its long-term investment strategies and global diversification.

Investment Summary

Franklin Resources presents a mixed investment case. On the positive side, the company benefits from a well-established brand, global diversification, and a diversified product portfolio. Its strong operating cash flow ($971.3M) and dividend yield (~1.26 per share) may appeal to income-focused investors. However, the firm faces challenges, including high total debt ($13.09B) relative to cash reserves ($4.41B), and a beta of 1.419, indicating higher volatility than the broader market. The net income of $464.8M (EPS $0.85) suggests profitability but may lag behind some peers in terms of efficiency. Investors should weigh the firm’s global reach against competitive pressures in the asset management industry, where passive investing and fee compression remain headwinds.

Competitive Analysis

Franklin Resources operates in a highly competitive asset management landscape dominated by large-scale players and passive investment trends. The firm’s competitive advantage lies in its diversified product offerings, global distribution network, and strong brand recognition under the Franklin Templeton umbrella. However, its active management focus puts it at a disadvantage compared to low-cost passive funds offered by competitors like BlackRock and Vanguard. Franklin’s international presence, particularly in emerging markets, provides growth opportunities but also exposes it to currency and geopolitical risks. The company’s ability to integrate acquisitions (such as Legg Mason in 2020) has strengthened its multi-boutique model, but execution risks remain. While its $847.8M revenue base is substantial, margin pressures and shifting investor preferences toward ETFs pose long-term challenges. Franklin must continue to innovate in alternative investments and ESG-focused products to differentiate itself in a crowded market.

Major Competitors

• BlackRock, Inc. (BLK): BlackRock is the world’s largest asset manager, with dominant positions in ETFs (via iShares) and institutional mandates. Its scale, technology (Aladdin platform), and passive investment dominance give it a structural advantage over Franklin. However, BlackRock’s sheer size may limit agility in niche markets where Franklin can compete with specialized active strategies.
• T. Rowe Price Group, Inc. (TROW): T. Rowe Price is a strong competitor in active asset management, with a focus on retirement solutions and equity funds. Like Franklin, it emphasizes active management but has a more concentrated institutional client base. T. Rowe’s lower debt profile and higher margins may make it more resilient in downturns, though it lacks Franklin’s global boutique structure.
• Invesco Ltd. (IVZ): Invesco competes with Franklin in active and alternative asset management, with a significant ETF business (via Invesco QQQ). Its acquisition-driven growth strategy mirrors Franklin’s, but Invesco has faced challenges in integrating OppenheimerFunds. Franklin’s stronger brand in fixed income may give it an edge in certain segments.
• Brookfield Asset Management (BAM): Brookfield is a leader in alternative asset management (real estate, infrastructure), a segment where Franklin is expanding. Brookfield’s higher-fee alternative investments provide margin advantages, but Franklin’s traditional asset management base offers more stability. Franklin’s mutual fund focus contrasts with Brookfield’s institutional-heavy model.
• Artisan Partners Asset Management Inc. (APAM): Artisan is a smaller, high-conviction active manager competing with Franklin’s boutique approach. Artisan’s concentrated strategies appeal to performance-seeking investors, but Franklin’s broader product suite and global distribution provide diversification benefits. Artisan’s lack of a significant fixed income presence is a key differentiator.