Franklin Lifts Dividend & Expands Repurchase Plan: Is it Sustainable?

Franklin Resources, Inc. BEN recently announced a quarterly dividend increase to 33 cents per share and expanded its stock repurchase program. The dividend will be payable on Jan. 9, 2026, to its shareholders of record as of Dec. 30, 2025. The quarterly dividend of 33 cents per share represents a 3.1% increase over both the prior quarter and the same quarter last year. Previously, the company had raised its quarterly dividend in December 2024 to 32 cents per share, representing a 3.2% increase at that time. BEN has consistently raised dividends annually since 1981, highlighting its commitment to returning capital to shareholders.

At the closing price of $24 on Friday, BEN’s dividend yield stands at 5.33%, significantly higher than the industry average of 2.16%. The company’s payout ratio is 58%, balancing consistent shareholder returns with reinvestment in the business. Over the past five years, it has increased its dividend six times, providing consistent income for investors seeking reliable returns.

Dividend Yield

Along with the dividend increase, BEN’s board of directors has authorized an expansion of its stock repurchase program. Under the new authorization, the company may repurchase up to 20.8 million additional shares through open-market or private transactions, bringing the total shares available for repurchase to 40 million. This new authorization supplements the existing program, which had roughly 19.2 million shares remaining as of Nov. 30, 2025. Shares repurchased under the program are retired, effectively reducing outstanding shares and enhancing shareholder value.

The company also maintains a decent liquidity position. As of Sept. 30, 2025, Franklin’s liquidity, comprising cash, cash equivalents, receivables and investments, totaled $5.6 billion, with no short-term debt. This liquidity strength, along with earnings stability, supports continued dividend payments and opportunistic share repurchases.

With its dividend increase, expanded repurchase plan and decent liquidity position, Franklin appears well-positioned to reward its shareholders through a combination of steady income and capital returns.

Capital Deployment Plans of Other Finance Firms

Earlier this month, Raymond James Financial, Inc. RJF approved a $2 billion share repurchase plan, replacing the prior $1.5 billion program. Raymond also raised its quarterly dividend by 8% to 54 cents per share, payable Jan. 16, 2026, to its shareholders of record as of Jan. 2. Over the last decade, Raymond has consistently raised dividends, including an 11.1% increase in December 2024. Currently, the dividend yield stands at 1.23%, supported by a payout ratio of 19%. The company had cash and cash equivalents of $11.4 billion as of Sept. 30, 2025, with borrowings of $700 million, reflecting a healthy liquidity position to support capital distributions.

Last week, Truist Financial Corp. TFC announced a new $10 billion share repurchase plan, replacing its prior $5 billion program that had about $1.5 billion remaining. Truist maintained its quarterly dividend at 52 cents per share, reflecting an annualized yield of 4.15%. Over the past five years, TFC has raised its dividend twice, with a five-year annualized growth rate of 3.2%. As of Sept. 30, 2025, Truist reported total debt of $71.1 billion, with 41.3% classified as short-term, while cash, due from banks and interest-bearing deposits with banks totaled $36.9 billion, supporting its shareholder-friendly capital deployment initiatives.

BEN's Price Performance and Zacks Rank

Over the past year, BEN shares have gained 4.9% against the industry’s decline of 2%.

Price Performance

Franklin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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