When it comes to dividend investing, the Dividend Aristocrats are the “cream of the crop.” The Dividend Aristocrats are stocks in the S&P 500 Index, with 25+ consecutive years of dividend increases.

There are thousands of stocks to choose from, many of which pay dividends. But the Aristocrats have profitable businesses, and the ability to grow their profits. This gives them the ability to withstand recessions, and continue increasing their dividends each year.

Franklin Resources (BEN) has increased its dividend for 36 years. The stock has a dividend yield below 2%, but it makes up for this with 10%+ annual dividend increases. For example, the company raised its dividend by 11% in 2017.

After a couple of difficult years of declining assets under management, Franklin Resources has returned to growth this year. It could continue to raise its dividend by double-digits each year, which makes it an attractive stock for dividend growth.

Business Overview

Franklin Resources is an investment management company. It was founded in 1947 in New York, by Rupert H. Johnson Sr., who had previously managed a Wall Street brokerage firm.

He named the company after Benjamin Franklin, the founding father who was viewed as a symbol for frugality, saving, and wise investments.

Today, Franklin Resources manages the Franklin and Templeton families of mutual funds. A breakdown of the company’s assets under management, by investment objective and sales region, is below:

Source: Q3 Earnings Presentation, page 3

This is a difficult time for Franklin Resources. 2015 and 2016 were very challenging years for the company. In 2015, revenue and earnings-per-share declined by 6% and 13%, respectively. Things only got worse the following year—in 2016, revenue fell 17%, while earnings-per-share declined 11%.

The declines were due to under-performance across several of the company’s flagship funds. Weak performance is a big problem for an asset manager, because it typically results in lower assets under management.