Analyzing Franklin Resources (NYSE:BEN) and ONEX (OTCMKTS:ONEXF)

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

Valuation and Earnings

This table compares Franklin Resources and ONEX”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Resources	$8.48 billion	1.56	$464.80 million	$0.51	49.29
ONEX	$649.00 million	8.87	$303.00 million	$6.21	13.16

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

Insider and Institutional Ownership

47.6% of Franklin Resources shares are held by institutional investors. Comparatively, 0.7% of ONEX shares are held by institutional investors. 22.9% of Franklin Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Franklin Resources has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, ONEX has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Dividends

Franklin Resources pays an annual dividend of $1.28 per share and has a dividend yield of 5.1%. ONEX pays an annual dividend of $0.29 per share and has a dividend yield of 0.4%. 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. ONEX pays out 4.7% of its earnings in the form of a dividend. Franklin Resources has increased 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Franklin Resources and ONEX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	5	5	3	0	1.85
ONEX	0	0	1	1	3.50

Franklin Resources currently has a consensus price target of $23.4167, indicating a potential downside of 6.85%. Given Franklin Resources’ higher probable upside, research analysts clearly believe Franklin Resources is more favorable than ONEX.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Franklin Resources	3.73%	8.73%	3.57%
ONEX	60.42%	5.40%	3.43%

Summary

Franklin Resources beats ONEX on 12 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 ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.