Critical Analysis: DigitalBridge Group (NYSE:DBRG) & Franklin Resources (NYSE:BEN)

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

Risk & Volatility

Franklin Resources has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, DigitalBridge Group has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Franklin Resources and DigitalBridge Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	2	5	0	0	1.71
DigitalBridge Group	0	0	4	1	3.20

Franklin Resources currently has a consensus price target of $27.50, suggesting a potential upside of 9.34%. DigitalBridge Group has a consensus price target of $22.08, suggesting a potential upside of 27.72%. Given DigitalBridge Group’s stronger consensus rating and higher probable upside, analysts plainly believe DigitalBridge Group is more favorable than Franklin Resources.

Earnings & Valuation

This table compares Franklin Resources and DigitalBridge Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Resources	$7.85 billion	1.69	$882.80 million	$1.90	13.24
DigitalBridge Group	$1.50 billion	1.88	$185.28 million	$0.49	35.29

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

Dividends

Franklin Resources pays an annual dividend of $1.24 per share and has a dividend yield of 4.9%. DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Franklin Resources pays out 65.3% of its earnings in the form of a dividend. DigitalBridge Group pays out 8.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Franklin Resources has raised its dividend for 1 consecutive years. Franklin Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Franklin Resources and DigitalBridge Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Resources	12.30%	11.15%	4.69%
DigitalBridge Group	12.33%	2.39%	0.79%

Insider & Institutional Ownership

47.6% of Franklin Resources shares are owned by institutional investors. Comparatively, 92.7% of DigitalBridge Group shares are owned by institutional investors. 24.1% of Franklin Resources shares are owned by insiders. Comparatively, 3.4% of DigitalBridge Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

DigitalBridge Group beats Franklin Resources on 10 of the 18 factors compared between the two stocks.

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 DigitalBridge Group

DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.