We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold Broadridge (BR) in Your Portfolio
Read MoreHide Full Article
Broadridge Financial Solutions, Inc. (BR - Free Report) is currently benefiting from a strong business model backed by healthy recurring revenues. The company’s shares have gained 22.1% over the past year, outperforming the 6.6% rally of the industry it belongs to and 17% growth of the Zacks S&P 500 composite.
What’s Supporting the Rally?
Broadridge’s robust business model ensures significant recurring fee revenues, including contributions from net new business, internal growth and acquisition-related synergies. In the first quarter of fiscal 2021, recurring fee revenues of $671 million increased 8% year over year.
The February 2020 acquisition of FundsLibrary has strengthened the company’s pan-European regulatory communications and digital data platform, supporting the lifecycle of fund data, documents as well as regulatory reporting for the investment industry. The 2019 buyout of ClearStructure Financial Technology has expanded the company’s asset-management technology suite across private debt markets, and that of Fi360 has strengthened its Investor Communication Solutions segment.
Broadridge has a track record of consistent dividend payment. During fiscal 2019, the company paid out cash dividends of $63.9 million. It paid out $211.2 million, $165.8 million and $152.2 million of dividends during fiscal 2019, 2018 and 2017, respectively.
Some Risks
Broadridge has a debt-laden balance sheet. Total debt at the end of first-quarter fiscal 2021 was $1.78 billion, flat sequentially. The total-debt-to-total-capital ratio of 0.56 was higher than the industry’s 0.39. A high debt-to-capitalization ratio indicates higher risk of insolvency in challenging times.
Further, the company’s cash and cash equivalent balance of $357 million at the end of the first-quarter was well below the debt level, underscoring that the company doesn’t have enough cash to meet this debt burden.
Zacks Rank and Key Picks
Broadridge currently carries a Zacks Rank #3 (Hold).
The long-term expected earnings per share (three to five years) growth rate for Republic Services, Gartner and NV5 Global is 9.4%, 13.5% and 16.8%, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Here's Why You Should Hold Broadridge (BR) in Your Portfolio
Broadridge Financial Solutions, Inc. (BR - Free Report) is currently benefiting from a strong business model backed by healthy recurring revenues. The company’s shares have gained 22.1% over the past year, outperforming the 6.6% rally of the industry it belongs to and 17% growth of the Zacks S&P 500 composite.
What’s Supporting the Rally?
Broadridge’s robust business model ensures significant recurring fee revenues, including contributions from net new business, internal growth and acquisition-related synergies. In the first quarter of fiscal 2021, recurring fee revenues of $671 million increased 8% year over year.
The February 2020 acquisition of FundsLibrary has strengthened the company’s pan-European regulatory communications and digital data platform, supporting the lifecycle of fund data, documents as well as regulatory reporting for the investment industry. The 2019 buyout of ClearStructure Financial Technology has expanded the company’s asset-management technology suite across private debt markets, and that of Fi360 has strengthened its Investor Communication Solutions segment.
Broadridge has a track record of consistent dividend payment. During fiscal 2019, the company paid out cash dividends of $63.9 million. It paid out $211.2 million, $165.8 million and $152.2 million of dividends during fiscal 2019, 2018 and 2017, respectively.
Some Risks
Broadridge has a debt-laden balance sheet. Total debt at the end of first-quarter fiscal 2021 was $1.78 billion, flat sequentially. The total-debt-to-total-capital ratio of 0.56 was higher than the industry’s 0.39. A high debt-to-capitalization ratio indicates higher risk of insolvency in challenging times.
Further, the company’s cash and cash equivalent balance of $357 million at the end of the first-quarter was well below the debt level, underscoring that the company doesn’t have enough cash to meet this debt burden.
Zacks Rank and Key Picks
Broadridge currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , Gartner, Inc. (IT - Free Report) and NV5 Global (NVEE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for Republic Services, Gartner and NV5 Global is 9.4%, 13.5% and 16.8%, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>