Contrasting Franklin Resources (NYSE:BEN) and T. Rowe Price Group (NASDAQ:TROW)

Franklin Resources (NYSE:BEN) and T. Rowe Price Group (NASDAQ:TROW) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Franklin Resources and T. Rowe Price Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	5	6	3	0	1.86
T. Rowe Price Group	4	8	1	0	1.77

Franklin Resources presently has a consensus price target of $23.58, indicating a potential upside of 1.37%. T. Rowe Price Group has a consensus price target of $101.55, indicating a potential downside of 1.86%. Given Franklin Resources’ stronger consensus rating and higher probable upside, equities analysts plainly believe Franklin Resources is more favorable than T. Rowe Price Group.

Earnings and Valuation

This table compares Franklin Resources and T. Rowe Price Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Resources	$8.48 billion	1.42	$464.80 million	$0.51	45.62
T. Rowe Price Group	$7.09 billion	3.20	$2.10 billion	$8.95	11.56

T. Rowe Price Group has lower revenue, but higher earnings than Franklin Resources. T. Rowe Price Group is trading at a lower price-to-earnings ratio than Franklin Resources, indicating that it is currently the more affordable of the two stocks.

Dividends

Franklin Resources pays an annual dividend of $1.28 per share and has a dividend yield of 5.5%. T. Rowe Price Group pays an annual dividend of $5.08 per share and has a dividend yield of 4.9%. Franklin Resources pays out 251.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. T. Rowe Price Group pays out 56.8% of its earnings in the form of a dividend. Franklin Resources has increased its dividend for 45 consecutive years and T. Rowe Price Group has increased its dividend for 39 consecutive years. Franklin Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

47.6% of Franklin Resources shares are held by institutional investors. Comparatively, 73.4% of T. Rowe Price Group shares are held by institutional investors. 22.9% of Franklin Resources shares are held by company insiders. Comparatively, 1.6% of T. Rowe Price Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

Franklin Resources has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, T. Rowe Price Group has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Profitability

This table compares Franklin Resources and T. Rowe Price Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Resources	3.73%	8.76%	3.57%
T. Rowe Price Group	28.72%	19.77%	15.04%

About Franklin Resources

Franklin Resources, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, institutions, pension plans, trusts, and partnerships. It launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries. The firm invests in the public equity, fixed income, and alternative markets. Franklin Resources, Inc. was founded in 1947 and is based in San Mateo, California with an additional office in Calgary, Canada; Dubai, United Arab Emirates; Edinburgh, United Kingdom; Fort Lauderdale, United States; Hyderabad, India; London, United Kingdom; Rancho Cordova, United states; Shanghai, China; Singapore; Stamford, United States; and Vienna, Austria.

About T. Rowe Price Group

T. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; New York, New York; Philadelphia, Pennsylvania; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Shanghai, China; Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, Amsterdam, Netherlands and Washington, DC.