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Reasons Why You Should Bet on Broadridge (BR) Stock Now
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Broadridge Financial Solutions, Inc.’s (BR - Free Report) shares have had an impressive run over the past year. The stock has gained 41%, significantly outperforming the 14.8% rally of the industry it belongs to and the 24.7% growth of the Zacks S&P 500 composite.
Let’s take a look at some factors that make the stock an attractive pick.
Solid Rank & VGM Score: Broadridge currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Strong Growth Prospects: The company’s Zacks Consensus Estimate for fiscal 2024 earnings of $7.72 indicates year-over-year growth of 10.1%. Moreover, earnings are expected to register 8.9% growth in fiscal 2025.
Positive Earnings Surprise History: Broadridge has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering an earnings surprise of 6.5%, on average.
Driving Factors: Broadridge maintains a strong business model with substantial recurring revenue streams, which provides good visibility on its organic revenues in the near to mid-term. A significant portion of the income is derived from recurring fees, encompassing net new business, internal expansion and acquisition-related benefits. In fiscal 2023, recurring revenues accounted for nearly 66% of the total revenues despite ongoing economic uncertainties. Total revenues grew 6% year over year in fiscal 2023, following 14% and 10% growth in fiscal 2022 and 2021, respectively.
Commitment to shareholder returns makes BR a reliable way for investors to compound wealth over the long term. In 2023, 2022 and 2021, the company paid $331.0 million, $290.7 million and $261.7 million, respectively, in dividends. We are expecting steady growth in income, which will translate to steady cash flow, enabling Broadridge to pay out stable dividends. Per our estimates, the firm’s adjusted net income will grow 8.8%, 2.5% and 9.7% in fiscal 2024, 2025 and 2026, respectively.
Broadridge's current ratio (a measure of liquidity) at the end of second-quarter fiscal 2024 was pegged at 1.4, higher than the year-ago quarter’s 1.26. An increasing current ratio is desirable as it indicates that the company may not have problems meeting its short-term debt obligations. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.
Core & Main flaunts a Zacks Rank of 1 at present. CNM has a long-term earnings growth expectation of 12%.CNM delivered a trailing four-quarter earnings surprise of 1.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hackett Group currently carries a Zacks Rank of 2. The company has a long-term earnings growth expectation of 13.5%. HCKT delivered a trailing four-quarter earnings surprise of 2.6%, on average.
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Reasons Why You Should Bet on Broadridge (BR) Stock Now
Broadridge Financial Solutions, Inc.’s (BR - Free Report) shares have had an impressive run over the past year. The stock has gained 41%, significantly outperforming the 14.8% rally of the industry it belongs to and the 24.7% growth of the Zacks S&P 500 composite.
Let’s take a look at some factors that make the stock an attractive pick.
Solid Rank & VGM Score: Broadridge currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Broadridge Financial Solutions, Inc. Price
Broadridge Financial Solutions, Inc. price | Broadridge Financial Solutions, Inc. Quote
Strong Growth Prospects: The company’s Zacks Consensus Estimate for fiscal 2024 earnings of $7.72 indicates year-over-year growth of 10.1%. Moreover, earnings are expected to register 8.9% growth in fiscal 2025.
Positive Earnings Surprise History: Broadridge has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering an earnings surprise of 6.5%, on average.
Driving Factors: Broadridge maintains a strong business model with substantial recurring revenue streams, which provides good visibility on its organic revenues in the near to mid-term. A significant portion of the income is derived from recurring fees, encompassing net new business, internal expansion and acquisition-related benefits. In fiscal 2023, recurring revenues accounted for nearly 66% of the total revenues despite ongoing economic uncertainties. Total revenues grew 6% year over year in fiscal 2023, following 14% and 10% growth in fiscal 2022 and 2021, respectively.
Commitment to shareholder returns makes BR a reliable way for investors to compound wealth over the long term. In 2023, 2022 and 2021, the company paid $331.0 million, $290.7 million and $261.7 million, respectively, in dividends. We are expecting steady growth in income, which will translate to steady cash flow, enabling Broadridge to pay out stable dividends. Per our estimates, the firm’s adjusted net income will grow 8.8%, 2.5% and 9.7% in fiscal 2024, 2025 and 2026, respectively.
Broadridge's current ratio (a measure of liquidity) at the end of second-quarter fiscal 2024 was pegged at 1.4, higher than the year-ago quarter’s 1.26. An increasing current ratio is desirable as it indicates that the company may not have problems meeting its short-term debt obligations. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.
Zacks Rank and Other Stocks to Consider
A couple of other top-ranked stocks in the broader Zacks Business Services sector are Core & Main (CNM - Free Report) and The Hackett Group (HCKT - Free Report) .
Core & Main flaunts a Zacks Rank of 1 at present. CNM has a long-term earnings growth expectation of 12%.CNM delivered a trailing four-quarter earnings surprise of 1.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hackett Group currently carries a Zacks Rank of 2. The company has a long-term earnings growth expectation of 13.5%. HCKT delivered a trailing four-quarter earnings surprise of 2.6%, on average.