Stock Watch
Franklin Resources Inc.: Profits On the Rise
As investors regain confidence in the stock market, earnings and assets are growing at this financial services firm.
December 15, 2003
At Franklin Resources (BEN) a penny saved is a penny earned. The firm offers mutual funds, banking services, insurance products, investment management and other financial services.
As the stock market pulled out of its slump this year and investors regained confidence, earnings and assets have grown nicely for Franklin. The global company has also benefited from favorable currency exchange rates.
Analysts at Standard & Poor's think Franklin has performed impressively this year. They say earnings and revenues should continue to improve -- not only because of the high concentration of clients in high-margin equity funds, but because Franklin has a good reputation and manages its own finances well.
The stock trades at 18 times 2004 consensus earnings estimates of $2.72 per share. That's in line with the S&P 500, but analysts expect Franklin profits to grow 12% annually over the next few years compared with just 7% for the index.--Erin Burt