Portfolio Update
The FiveTwenty portfolio received $78.54 dividends in the past week. VFC paid their quarterly dividend during the week.
| Past Week Dividend | $78.54 |
| Current Quarter Dividend (Q4 2022) | $1,679.36 |
| LifeTime Dividend | $7,974.64 |
| Estimated Annual Dividend | $7,682.85 |
The capital allocation for the week of 12/25/2022 to 12/31/2022 will be used to add to our position in Franklin Resources (NYSE: BEN)
BEN – Position Update
Since our last check-in on BEN in week 12 of 2022, the company reported Q2 2022 earnings on 05/03/2022, Q3 2022 earnings on 07/28/2022, and Q4 and FY 2022 earnings on 11/01/2022. In addition, the share prices decreased 2.9% from $27.65 to $26.85 during that period.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 43 years | 42 years | |
| Yield | 4.32% | 4.05% | 1.91% |
| Payout Ratio | 31.87%1 | 27.63%2 | |
| P/E | 7.381 | 6.762 |
1 computed using TTM adjusted EPS of $3.63 as of Q4 2022
2 computed using TTM adjusted EPS of $4.09 as of Q1 2022
FY 2022 earnings report
Did BEN’s latest earnings report raise any warning flags?
The poor performance of the stock market during 2022 has negatively impacted BEN’s AUM due to lower asset prices and net outflows. Lower AUM means lower revenues for BEN. However, the company was able to offset some of the decrease through the acquisitions of Lexington Partners, Alcentra, and O’Shaughnessy Asset Management. Overall, revenue decreased 2%, adjusted net income dropped 2%, and adjusted EPS were 3% lower for FY 2022 compared to FY 2021.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| FY 2021 | $8,425.5 | $2,379.3 | $3.74 |
| FY 2022 | $8,275.3 | $2,323.5 | $3.63 |
| % Change | (2)% | (2)% | (3)% |
Additional noteworthy developments during the quarter:
- On 11/01/2022, the company close the acquisition of Alcentra which brought in $35 billion in assets.
- On 12/13/2022, BEN declared a dividend of $0.30 per share payable on 01/13/2023 to shareholders of record on 12/30/2022. The dividend represents an increase of 3.4%.
- BEN’s AUM as of 11/30/2022 were $1,410.6 billion an increase compared to AUM as of 10/31/2022 of $1,318.4.
Thesis
Why are we adding to our position in BEN?
Throughout the year BEN has continued to work on diversifying its asset mix through acquisitions and has navigated the headwinds this year relatively well. Therefore, we are adding to our position in BEN in order to take advantage of the depressed valuation for asset management companies.
PS: It seems like we are ending the second year in a row with an investment in BEN.
Previous Articles
- 2022 Week 12: Franklin Resources (NYSE: BEN)
- 2021 Week 52: Franklin Resources (NYSE: BEN)
- 2021 Week 50: Franklin Resources (NYSE: BEN)
Photo by Dan Mall on Unsplash