“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
A long-term investment in Franklin Resources Inc (NYSE: BEN) produced a positive but modest total return over the past 20 years. Using a dividend-reinvestment framework, a $10,000 investment made on 04/24/2006 would have grown to $16,134.38 by 04/21/2026. That equates to a 61.44% total return, or an average annual return of 2.42%.
The result is notable because Franklin Resources, the parent of Franklin Templeton, has long been identified with income investing and asset management. Over a full market cycle that included the global financial crisis, a prolonged bull market, the rise of passive investing, and shifting fee pressure across the fund industry, shareholder outcomes depended less on price appreciation alone and more on the contribution from dividends and reinvestment.
BEN 20-Year Return Details
| Start date: | 04/24/2006 |
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| End date: | 04/21/2026 | ||||
| Start price/share: | $32.12 | ||||
| End price/share: | $27.24 | ||||
| Starting shares: | 311.33 | ||||
| Ending shares: | 592.65 | ||||
| Dividends reinvested/share: | $19.67 | ||||
| Total return: | 61.44% | ||||
| Average annual return: | 2.42% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $16,134.38 | ||||
What Drove Franklin Resources’ 20-Year Return?
The most important takeaway is that BEN’s total return was meaningfully stronger than its share-price performance alone. The stock price declined from $32.12 to $27.24 over the measurement period, yet the investment still generated a positive overall return because dividends were reinvested into additional shares throughout the period.
That distinction matters. In a business with a mature earnings profile and a meaningful dividend payout, capital appreciation may not be the sole or even primary source of shareholder return over long holding periods. In this case, dividend reinvestment increased the share count from 311.33 shares to 592.65 shares, a substantial expansion in ownership despite the lower ending share price.
According to the figures above, Franklin Resources paid a cumulative $19.67 per share in reinvested dividends over the period. That income stream was a central component of the ending value. Without reinvestment, the long-run outcome would have looked materially different.
Key Figures at a Glance
- Initial investment: $10,000
- Ending value: $16,134.38
- Total return: 61.44%
- Annualized return: 2.42%
- Starting share price: $32.12
- Ending share price: $27.24
- Total dividends reinvested per share: $19.67
Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $1.32 per share, BEN has a current dividend yield of approximately 4.85%, using the ending share price shown above. Another useful measure is yield on cost, which compares the current annualized dividend to the original purchase price.
Using the 2006 purchase price of $32.12 per share, the current annualized dividend implies a yield on cost of about 4.11%. That figure is distinct from the current market yield. Current yield measures income relative to today’s share price, while yield on cost measures income relative to the investor’s original entry price.
For long-term holders of dividend-paying stocks, yield on cost can illustrate how a steady payout stream compounds over time. It is best used as a descriptive measure of an existing investment rather than as a valuation tool for a new purchase decision.
How to Interpret the Result
A 20-year annualized return of 2.42% indicates that Franklin Resources preserved and grew capital, but at a pace that was relatively restrained for such a long period. The outcome underscores two broader points.
- Dividends mattered substantially. The investment generated a positive total return despite a lower ending share price.
- Business and industry change mattered as well. Asset managers have faced structural pressure from lower-fee products, passive fund growth, and evolving client preferences, all of which can influence valuation multiples and earnings growth.
For that reason, long-term return analysis should separate three drivers: underlying business performance, valuation change, and cash distributions. BEN’s historical result reflects all three, with dividends doing much of the heavy lifting.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Nearly every time I strayed from the herd, I’ve made a lot of money. Wandering away from the action is the way to find the new action.” — Jim Rogers
