Critical Contrast: Cannae (NYSE:CNNE) vs. Franklin Resources (NYSE:BEN)

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Resources	$8.85 billion	1.58	$524.90 million	$1.08	24.90
Cannae	$452.50 million	1.55	-$304.60 million	($7.73)	-1.84

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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Franklin Resources and Cannae, as reported by MarketBeat.com.

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

Franklin Resources presently has a consensus target price of $25.89, suggesting a potential downside of 3.74%. Cannae has a consensus target price of $20.50, suggesting a potential upside of 44.47%. Given Cannae’s stronger consensus rating and higher probable upside, analysts clearly believe Cannae is more favorable than Franklin Resources.

Risk & Volatility

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

Profitability

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

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

Insider & Institutional Ownership

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

Dividends

Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.9%. Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 4.2%. 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. Cannae pays out -7.8% 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.

Summary

Franklin Resources beats Cannae on 12 of the 16 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 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.