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Broadridge (BR) Rides on Recurring Revenues, Debt Woes Persist

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Broadridge Financial Solutions, Inc. (BR - Free Report) is currently benefiting from strategic acquisitions and a strong business model.

The company recently reported second-quarter fiscal 2022 adjusted earnings of 83 cents per share that surpassed the Zacks Consensus Estimate by 2.5% and increased 13.7% on a year-over-year basis. Total revenues of $1.3 billion beat the consensus mark by 4.3% and rose 19.4% year over year.

How is Broadridge Doing?

Broadridge’s robust business model ensures significant recurring-fee revenues, including contributions from net new business, internal growth and acquisition-related synergies. In the second quarter of fiscal 2022, recurring-fee revenues of $798 million increased 19% year over year.

Broadridge has been supplementing internal growth with strategic acquisitions. The recent acquisition of AdvisorStream boosts 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, significantly increased Broadridge’s revenues outside of North America and expanded the company’s international footprint.

The company has a track record of consistent dividend payments. During fiscal 2021, the company paid cash dividends of $261.7 million. It paid out $241 million and $211.2 million of dividends during fiscal 2020 and 2019, respectively.

Broadridge has more long-term depth outstanding than cash. Cash and cash equivalents balance of $281.2 million at the end of the fiscal second quarter was well below its long-term debt of $4.2 billion.

Zacks Rank and Stocks to Consider

Broadridge currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Cross Country Healthcare (CCRN - Free Report) , Clean Harbors (CLH - Free Report) and Genpact (G - Free Report) .

Cross Country Healthcare sports a Zacks Rank #1 (Strong Buy). The company has a long-term earnings growth of 21.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare’s shares have surged 139.5% in the past year. CCRN pulled off a trailing four-quarter earnings surprise of 75%, on average.

Clean Harbors carries a Zacks Rank #2 (Buy). The company has an expected earnings growth rate of 3.4% for 2022.

Clean Harbors delivered a trailing four-quarter earnings surprise of 50.5%, on average. CLH’s shares have jumped 11.8% in the past year.

Genpact also carries a Zacks Rank #2. The company has an expected earnings growth rate of 9.8% for 2022.

Genpact delivered a trailing four-quarter earnings surprise of 15.1%, on average. G’s shares have gained 21.2% in the past year.

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