Passive income has become a popular topic among investors looking to diversify their income streams and achieve financial stability beyond traditional full-time jobs. One common example of passive income is rental properties, where landlords can collect rent each month without actively managing the property. However, with the economic landscape constantly changing, many individuals are exploring other avenues for generating passive income.
One such avenue is investing in stocks, particularly dividend-paying equities, which offer a reliable way to generate passive income. Dividend income has been steadily increasing over the years, with dividends accounting for more than one-third of total returns from the broader market since 1936. Investing in dividend-paying stocks has the potential to provide a steady income stream, especially during periods of low yields and market volatility.
Franklin Resources, Inc. (NYSE:BEN) is one such company that stands out as a potential investment for passive income seekers. As an American multinational asset management company, Franklin Resources offers a range of services and products to consumers. The company recently announced its 49th consecutive year of dividend growth, with a dividend yield of 6.29% as of February 24. This makes BEN one of the best stocks for passive income.
In fiscal Q1 2025, Franklin Resources reported a significant increase in long-term inflows, excluding reinvested distributions, and posted $17 billion in net inflows across various investments. Despite experiencing some long-term net outflows, the company has made strategic acquisitions to strengthen its offerings, such as the acquisition of volScout, an options-trading technology firm.
While Franklin Resources ranks 8th on the list of the best stocks to buy for passive income, some AI stocks may offer greater promise for higher returns in a shorter time frame. Investors looking for AI stocks with potential for significant returns may want to explore other options. However, Franklin Resources remains a solid choice for those seeking a reliable income stream from dividend-paying stocks.
In conclusion, passive income is a valuable way to diversify income streams and achieve financial stability. Investing in dividend-paying stocks like Franklin Resources, Inc. can provide a steady income stream over time. While there may be other investment opportunities with higher return potential, Franklin Resources remains a strong contender for passive income seekers. Consider exploring different investment options to find the best fit for your financial goals and risk tolerance.
