Introduction

Franklin Resources, Inc. is a global investment management organization with approximately $1.4 trillion in assets under management (“AUM”) as of September 30, 2023. Our mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through our specialist investment managers, we offer specialization on a global scale bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. For over 75 years, we have been committed to providing clients with exceptional investment management services and have developed a globally diversified business, including through strategic acquisitions.

Asset Structure Analysis

Franklin Resources’ fiscal 2023 ended on September 30, 2023 and the fiscal 2022 ended on September 30, 2022.

Franklin Resources’ total assets were $30.1 billion as of September 30, 2023,up from $28 billion as of September 30, 2022.

Goodwill was $6 billion as of September 30, 2023, accounting for 20% of total assets.

Intangible assets, net were $4.9 billion as of September 30, 2023, making up 16.3% of total assets.

Assets of consolidated investment product were $10.35 billion as of September 30, 2023, representing 34.4% of total assets.

Investments were $2.2 billion as of September 30, 2023, accounting for 7.3% of total assets.

Cash and cash equivalents were $3.69 billion as of September 30, 2023, making up 12.3% of total assets.

Receivables were $1.35 billion as of September 30, 2023, representing 4.5% of total assets.

Liquidity and Solvency

Total liabilities were $16.55 billion as of September 30, 2023.

As you can see, Franklin Resources’ most assets are easily convertible assets, which cover the total liabilities.

Profitability

Total operating revenues were $7.85 billion, $8.28 billion and $8.43 billion in fiscal 2023, 2022 and 2021, respectively.

Net income attributable to Franklin Resources, Inc was $882.8 million, $1.29 billion and $1.83 billion in fiscal 2023, 2022 and 2021, respectively.

Cash Flow Analysis

Net cash provided by operating activities was $1.14 billion, $1.96 billion and $1.25 billion in fiscal 2023, 2022 and 2021, respectively.

Additions of property, plant and equipment, net were $148.8 million, $90.3 million and $79.3 million in fiscal 2023, 2022 and 2021, respectively.

Franklin Resources’ free cash flow was $991 million, $1.87 billion and $1.17 billion for fiscal 2023, 2022 and 2021, respectively.

Dividends paid on common stock were $607.3 million, $583.1 million and $559.7 million in fiscal 2023, 2022 and 2021, respectively.

Repurchases of common stock were $256.3 million, $180.8 million and $208.2 million in fiscal 2023, 2022 and 2021, respectively.

Conclusion

We think Franklin Resources’ free cash flow is more than $1 billion annually.

The company is not a growing company.

Franklin Resource stock price is $20.68 per share, which is undervalued, we believe.

Disclaimer: The content is for reference only and does not constitute investment advice.