“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
A five-year holding period can be a useful test of how a stock performs through different market conditions. For Franklin Resources Inc (NYSE: BEN), the result over the past five years shows the importance of distinguishing between share-price performance and total return. While BEN shares declined from their starting price, dividends and dividend reinvestment lifted the overall outcome into positive territory.
From 06/02/2021 through 06/01/2026, a $10,000 investment in Franklin Resources stock grew to $11,308.56 assuming dividends were reinvested. That equates to a total return of 13.07% and an average annual return of 2.49%.
BEN 5-Year Return Details
| Start date: | 06/02/2021 |
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| End date: | 06/01/2026 | ||||
| Start price/share: | $34.98 | ||||
| End price/share: | $30.94 | ||||
| Starting shares: | 285.88 | ||||
| Ending shares: | 365.44 | ||||
| Dividends reinvested/share: | $6.10 | ||||
| Total return: | 13.07% | ||||
| Average annual return: | 2.49% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $11,308.56 | ||||
In practical terms, the investment produced a modest positive total return despite a lower ending share price. BEN fell from $34.98 to $30.94 over the period, so price appreciation did not drive the result. The gain came from the cash distributions paid along the way and the additional shares accumulated through reinvestment.
What Drove the Return in Franklin Resources Stock?
The key takeaway is straightforward: dividends mattered more than price movement. Over the five-year period, Franklin Resources paid a cumulative $6.10 per share in dividends. Reinvesting those payments increased the share count from 285.88 to 365.44, which helped offset the stock’s price decline.
That distinction is especially important for asset managers and other income-oriented equities, where a large share of long-term shareholder return may come from capital returns rather than multiple expansion. Looking only at BEN’s share price would suggest a negative outcome. Looking at total return provides the more complete picture.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
BEN Total Return at a Glance
- Initial investment: $10,000
- Value after five years: $11,308.56
- Total return: 13.07%
- Annualized return: 2.49%
- Share price change: down from $34.98 to $30.94
- Ending share count with dividend reinvestment: 365.44
Current Yield and Yield on Cost
Based on the most recent annualized dividend rate of $1.32 per share, BEN has a current yield of approximately 4.27% using the ending share price of $30.94. That places the stock in a yield range that may remain relevant for investors evaluating income generation versus growth prospects.
Yield on cost offers a different perspective. By comparing the current annualized dividend of $1.32 to the original purchase price of $34.98, the yield on cost works out to about 3.77%.
That figure is often useful as a record of how an income stream has evolved relative to the original entry price, but it should not be confused with current yield. For valuation and forward-looking income comparisons, current yield is generally the more relevant measure because it reflects the dividend relative to the stock’s present market price.
Why BEN’s Return Profile Looks This Way
Franklin Resources operates in the asset management industry, where earnings and valuation are often sensitive to market levels, net flows, fee pressure, and product mix. In that context, a stock can generate a meaningful portion of shareholder return through dividends even during periods when the market assigns a lower valuation multiple or when operating growth remains constrained.
For BEN, the five-year result illustrates a common pattern in mature financial stocks: income can cushion weaker price performance, but it does not fully eliminate the effect of a declining share price. A positive total return is still materially different from strong compounding, and the gap between those two outcomes matters when comparing BEN with broader equity benchmarks or with peers in asset management.
Here’s one more investment quote before you go:
“Wide diversification is only required when investors do not understand what they are doing.” — Warren Buffett
