Financial Survey: Cannae (NYSE:CNNE) & Franklin Resources (NYSE:BEN)

Cannae (NYSE:CNNE) and Franklin Resources (NYSE:BEN) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

This table compares Cannae and Franklin Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cannae	-108.39%	-23.16%	-18.38%
Franklin Resources	6.97%	9.58%	3.87%

Valuation & Earnings

This table compares Cannae and Franklin Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cannae	$430.20 million	1.63	-$304.60 million	($7.73)	-1.84
Franklin Resources	$8.85 billion	1.60	$524.90 million	$1.08	25.22

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

Institutional & Insider Ownership

88.1% of Cannae shares are held by institutional investors. Comparatively, 47.6% of Franklin Resources shares are held by institutional investors. 10.9% of Cannae shares are held by company insiders. Comparatively, 23.4% of Franklin Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Cannae and Franklin Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cannae	1	1	2	0	2.25
Franklin Resources	4	5	2	0	1.82

Cannae presently has a consensus target price of $20.50, indicating a potential upside of 43.76%. Franklin Resources has a consensus target price of $25.89, indicating a potential downside of 4.96%. Given Cannae’s stronger consensus rating and higher probable upside, analysts clearly believe Cannae is more favorable than Franklin Resources.

Risk and Volatility

Cannae has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Franklin Resources has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500.

Dividends

Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 4.2%. Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.8%. Cannae pays out -7.8% of its earnings in the form of a dividend. Franklin Resources pays out 122.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Resources has raised its dividend for 45 consecutive years. Franklin Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Franklin Resources beats Cannae on 11 of the 16 factors compared between the two stocks.

About Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.

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.