Franklin Resources vs. T. Rowe Price: Assessing Value and Resilience Amid Market Volatility

In the asset management sector, where market volatility and investor sentiment play pivotal roles, contrarian investors often seek opportunities in firms that diverge from short-term trends. Franklin Resources (BEN) and T. Rowe Price (TROW) represent two distinct approaches to navigating this landscape. While both firms manage trillions in assets, their financial performance, historical resilience, and valuation metrics tell divergent stories. This analysis evaluates their strengths and risks through a contrarian lens, focusing on value and long-term stability.

Financial Performance: Short-Term Gains vs. Long-Term Consistency

Franklin Resources has outperformed T. Rowe Price in 2025, with a year-to-date (YTD) return of 30.78% compared to TROW’s 1.35% [3]. This surge reflects Franklin’s ability to capitalize on market rebounds, supported by a higher gross margin of 79.3% versus TROW’s 48.1% [3]. However, T. Rowe Price demonstrates superior long-term resilience, delivering an annualized return of 8.60% over the past decade versus Franklin’s 0.48% [3]. This contrast underscores a key contrarian consideration: Franklin’s short-term momentum may mask structural challenges, such as a decline in assets under management (AUM) during the first half of 2025, while TROW’s steady growth in multi-asset and fixed-income portfolios has driven AUM to $1.68 trillion [5].

Historical Resilience: Contrasting Downturn Responses

During past market crises, the two firms exhibited different behaviors. In the 2020 pandemic crash, T. Rowe Price’s stock plummeted 38.6%, mirroring the broader market’s turmoil [2]. Franklin Resources fared slightly worse, with a 43.65% decline in its stock price, attributed to both market conditions and weakening operating performance [1]. Conversely, during the 2008 financial crisis, Franklin’s earnings-per-share fell by 5.5%, while TROW experienced a prolonged downturn, taking 787 days to reach its lowest point [1]. TROW’s 39-year streak of consecutive dividend increases, however, highlights its commitment to shareholder stability even during volatility [2]. For contrarian investors, TROW’s disciplined approach to dividends and Franklin’s sharper but shorter downturns may signal differing risk profiles.

Valuation Metrics: Contrarian Opportunities and Risks

Valuation metrics further differentiate the two. T. Rowe Price trades at a P/E ratio of 12.5, significantly lower than Franklin’s 49.1 [1], suggesting it is undervalued relative to earnings. TROW’s net profit margin of 28.7% also outpaces Franklin’s 3.7%, reflecting stronger cost management [1]. Analysts project TROW’s earnings to reach $9.189 per share in 2025, compared to Franklin’s $2.106, reinforcing TROW’s growth trajectory [1]. However, Franklin’s higher dividend yield (4.93% vs. TROW’s 4.50%) and a debt-to-equity ratio of 1.00 (versus TROW’s 0.00) indicate a willingness to leverage for returns, which could appeal to risk-tolerant contrarians [3].

Analyst Outlook: Mixed Signals for Both

Analyst ratings for both firms lean toward “Hold,” but with nuanced differences. Franklin Resources has a consensus price target of $25.00, implying minimal downside from its current price of $24.97 [1]. T. Rowe Price’s target of $104.67 suggests a 3.01% downside from its $108.16 price, but its upward-revised earnings estimates and stronger revenue forecasts position it as a more optimistic long-term play [2]. For contrarians, Franklin’s undervalued P/B ratio of 1.01 [1] and TROW’s 2.29 [2] may signal divergent paths: Franklin’s low P/B could hint at overlooked value, while TROW’s premium reflects confidence in its AUM growth.

Conclusion: Contrarian Takeaways

Franklin Resources and T. Rowe Price embody contrasting strategies in the asset management sector. Franklin’s recent outperformance and higher dividend yield may attract investors seeking short-term gains, but its declining AUM and elevated P/E ratio raise questions about sustainability. T. Rowe Price, with its lower valuation, consistent dividend history, and long-term growth metrics, appears better positioned to weather prolonged volatility—a critical trait for contrarian portfolios. However, Franklin’s resilience during sharp downturns and disciplined leverage use could offer asymmetric rewards for those willing to bet on a rebound in its AUM and operating performance.

**Source:[1] Which Is a Better Investment, Franklin Resources, Inc. or T. Rowe Price Group, Inc. [https://www.aaii.com/investingideas/article/242085-which-is-a-better-investment-franklin-resources-inc-or-t-rowe-price-group-inc-stock][2] T. Rowe Price's AUM Climbs 6.9% in 1H 2025 [https://www.nasdaq.com/articles/t-rowe-prices-aum-climbs-69-1h-2025-whats-driving-growth][3] BEN vs. TROW — Stock Comparison Tool [https://portfolioslab.com/tools/stock-comparison/BEN/TROW]