Financial Review: Broadridge Financial Solutions (BR) versus Its Competitors

Broadridge Financial Solutions (NYSE: BR) is one of 27 public companies in the “Professional Information Services” industry, but how does it weigh in compared to its peers? We will compare Broadridge Financial Solutions to related businesses based on the strength of its earnings, analyst recommendations, valuation, profitability, dividends, institutional ownership and risk.

Valuation & Earnings

This table compares Broadridge Financial Solutions and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Broadridge Financial Solutions $4.14 billion $704.70 million 29.36
Broadridge Financial Solutions Competitors $3.19 billion $932.06 million 16.31

Broadridge Financial Solutions has higher revenue, but lower earnings than its peers. Broadridge Financial Solutions is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of recent ratings for Broadridge Financial Solutions and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Broadridge Financial Solutions 0 3 1 0 2.25
Broadridge Financial Solutions Competitors 138 614 710 13 2.41

Broadridge Financial Solutions currently has a consensus price target of $76.00, suggesting a potential downside of 5.19%. As a group, “Professional Information Services” companies have a potential downside of 0.72%. Given Broadridge Financial Solutions’ peers stronger consensus rating and higher probable upside, analysts clearly believe Broadridge Financial Solutions has less favorable growth aspects than its peers.

Dividends

Broadridge Financial Solutions pays an annual dividend of $1.32 per share and has a dividend yield of 1.6%. Broadridge Financial Solutions pays out 48.4% of its earnings in the form of a dividend. As a group, “Professional Information Services” companies pay a dividend yield of 1.5% and pay out 29.2% of their earnings in the form of a dividend. Broadridge Financial Solutions has raised its dividend for 9 consecutive years.

Volatility and Risk

Broadridge Financial Solutions has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Broadridge Financial Solutions’ peers have a beta of 0.99, meaning that their average share price is 1% less volatile than the S&P 500.

Profitability

This table compares Broadridge Financial Solutions and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Broadridge Financial Solutions 7.89% 37.99% 12.30%
Broadridge Financial Solutions Competitors 7.87% 28.36% 5.46%

Insider & Institutional Ownership

84.3% of Broadridge Financial Solutions shares are held by institutional investors. Comparatively, 63.5% of shares of all “Professional Information Services” companies are held by institutional investors. 3.5% of Broadridge Financial Solutions shares are held by company insiders. Comparatively, 10.6% of shares of all “Professional Information Services” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Broadridge Financial Solutions peers beat Broadridge Financial Solutions on 8 of the 15 factors compared.

Broadridge Financial Solutions Company Profile

Broadridge Financial Solutions, Inc. (Broadridge) is a provider of investor communications and technology-driven solutions to banks, broker-dealers, mutual funds and corporate issuers. The Company’s segments include Investor Communication Solutions, and Global Technology and Operations. The Company offers Bank/Broker-Dealer Investor Communication Solutions, Customer Communication Solutions, Corporate Issuer Solutions, Advisor Solutions and Mutual Fund and Retirement Solutions through Investor Communication Solutions segment. The Company offers a middle- and back-office securities processing platform for North American and global broker-dealers. Its services include investor and customer communications, securities processing, and data and analytics solutions. The Company delivers a range of solutions that helps its clients serve their retail and institutional customers across the entire investment lifecycle, including pre-trade, trade, and post-trade processing functionality.

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