PJT Partners (PJT) versus Franklin Resources (BEN) Critical Comparison

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

Dividends

PJT Partners pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. Franklin Resources pays an annual dividend of $0.92 per share and has a dividend yield of 3.0%. PJT Partners pays out 13.0% of its earnings in the form of a dividend. Franklin Resources pays out 28.8% 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 36 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 recent ratings and recommmendations for PJT Partners and Franklin Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PJT Partners 0 3 0 0 2.00
Franklin Resources 4 6 0 0 1.60

PJT Partners currently has a consensus target price of $57.67, suggesting a potential upside of 26.27%. Franklin Resources has a consensus target price of $32.80, suggesting a potential upside of 6.84%. Given PJT Partners’ stronger consensus rating and higher probable upside, research analysts clearly believe PJT Partners is more favorable than Franklin Resources.

Profitability

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

Net Margins Return on Equity Return on Assets
PJT Partners -2.98% 19.92% 15.65%
Franklin Resources 12.10% 16.00% 10.19%

Earnings and Valuation

This table compares PJT Partners and Franklin Resources’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PJT Partners $499.28 million 1.88 -$28.32 million $1.54 29.66
Franklin Resources $6.32 billion 2.56 $764.40 million $3.19 9.62

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

Risk and Volatility

PJT Partners has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, Franklin Resources has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Insider and Institutional Ownership

62.1% of PJT Partners shares are owned by institutional investors. Comparatively, 47.0% of Franklin Resources shares are owned by institutional investors. 8.0% of PJT Partners shares are owned by insiders. Comparatively, 22.2% of Franklin Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Franklin Resources beats PJT Partners on 9 of the 16 factors compared between the two stocks.

About PJT Partners

PJT Partners Inc. provides various strategic advisory, restructuring and special situations, and private fund advisory and placement services to corporations, financial sponsors, institutional investors, and governments worldwide. It offers a range of financial advisory and transaction execution capability, including mergers and acquisitions, joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory, private placements, and distressed sales. The company also advices companies, creditors, and financial sponsors on recapitalizations, reorganizations, exchange offers, debt repurchases, capital raises, and distressed mergers and acquisitions. In addition, it offers private fund advisory and placement services for a range of investment strategies, including private equity, hedge fund, real estate, and secondary advisory. The company was formerly known as Blackstone Advisory Inc. and changed its name to PJT Partners Inc. in March 2015. PJT Partners Inc. was incorporated in 2014 and is headquartered in New York, New York.

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 Hyderabad, India.

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