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Broadridge (BR) Riding on Recurring Revenues, Debt Woe Stays
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Broadridge Financial Solutions, Inc. (BR - Free Report) is currently benefiting from strategic acquisitions and a strong business model. The stock gained 13.6% in the past year.
The company recently reported first-quarter fiscal 2022’s adjusted earnings of $1.07 per share that surpassed the Zacks Consensus Estimate by 4.9% and increased 9% on a year-over-year basis. Total revenues of $1.2 billion also beat the consensus mark by 4.6% and rose 17% year over year.
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 2022, recurring-fee revenues of $751 million increased 16% year over year.
Broadridge has been supplementing internal growth with strategic acquisitions. The recent acquisition of AdvisorStream is expected to boost the company’s front-to-back office wealth capabilities, positioning it to better assist firms that aim to tap into and serve clients across digital channels. Another acquisition, Itiviti, is expected to significantly increase Broadridge’s revenues outside of North America and expand the company’s international footprint.
Broadridge has a track record of consistent dividend payment. During fiscal 2020, the company paid cash dividends of $241 million. It paid out $211.2 million, $165.8 million and $152.2 million of dividends during fiscal years 2019, 2018 and 2017, respectively.
Debt Burden Stays
Broadridge’s cash and cash equivalent of $317 million at the end of the fiscal first quarter was well below its long-term debt of $4.2 billion, underscoring that the company does not have enough cash to meet this debt burden. Broadridge, however, has no short-term debt to clear off.
Zacks Rank and Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold).
Avis Budget has an expected earnings growth rate of around 420.6% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 628.7% so far this year. CAR has a long-term earnings growth of 18.8%. CAR sport a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 447.8% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 200% so far this year. CCRN has a long-term earnings growth of 21.5%. CCRN sports a Zacks #1 Rank.
CRA International has an expected earnings growth rate of around 61.2% for the current year. CRA International has a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 87.5% so far this year. CRA International has a long-term earnings growth of 15.5%. FDS carries a Zacks #2 Rank (Buy).
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Broadridge (BR) Riding on Recurring Revenues, Debt Woe Stays
Broadridge Financial Solutions, Inc. (BR - Free Report) is currently benefiting from strategic acquisitions and a strong business model. The stock gained 13.6% in the past year.
The company recently reported first-quarter fiscal 2022’s adjusted earnings of $1.07 per share that surpassed the Zacks Consensus Estimate by 4.9% and increased 9% on a year-over-year basis. Total revenues of $1.2 billion also beat the consensus mark by 4.6% and rose 17% year over year.
Broadridge Financial Solutions, Inc. Price
Broadridge Financial Solutions, Inc. price | Broadridge Financial Solutions, Inc. Quote
Strong Business Model
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 2022, recurring-fee revenues of $751 million increased 16% year over year.
Broadridge has been supplementing internal growth with strategic acquisitions. The recent acquisition of AdvisorStream is expected to boost the company’s front-to-back office wealth capabilities, positioning it to better assist firms that aim to tap into and serve clients across digital channels. Another acquisition, Itiviti, is expected to significantly increase Broadridge’s revenues outside of North America and expand the company’s international footprint.
Broadridge has a track record of consistent dividend payment. During fiscal 2020, the company paid cash dividends of $241 million. It paid out $211.2 million, $165.8 million and $152.2 million of dividends during fiscal years 2019, 2018 and 2017, respectively.
Debt Burden Stays
Broadridge’s cash and cash equivalent of $317 million at the end of the fiscal first quarter was well below its long-term debt of $4.2 billion, underscoring that the company does not have enough cash to meet this debt burden. Broadridge, however, has no short-term debt to clear off.
Zacks Rank and Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Cross Country Healthcare, Inc. (CCRN - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget has an expected earnings growth rate of around 420.6% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 628.7% so far this year. CAR has a long-term earnings growth of 18.8%. CAR sport a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 447.8% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 200% so far this year. CCRN has a long-term earnings growth of 21.5%. CCRN sports a Zacks #1 Rank.
CRA International has an expected earnings growth rate of around 61.2% for the current year. CRA International has a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 87.5% so far this year. CRA International has a long-term earnings growth of 15.5%. FDS carries a Zacks #2 Rank (Buy).