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Why Broadridge (BR) Gained 22.1% in the Past 3 Months?
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Shares of Broadridge Financial Solutions, Inc. (BR - Free Report) have rallied 22.1% in the past three-month period, primarily on strong shareholder-friendly measures, a solid business model and strategic acquisitions.
Image Source: Zacks Investment Research
Reasons for Upside
We are impressed with Broadridge’s endeavors in rewarding its shareholders through share repurchases and dividend payments. In fiscal 2021, BR returned $261.7 million of dividends. In fiscal 2020, BR returned $241 million of dividends. In fiscal 2019, Broadridge returned $466.2 million through a combination of dividend payments of $211.2 million and share repurchases worth $225 million. Such moves highlight BR’s commitment to creating value for its shareholders and underline its confidence in its business. Besides, these moves instill investors’ confidence in the stock and contribute to earnings per share.
We believe that Broadridge has a strong business model. BR generates recurring revenues and a good percentage of its business comes from recurring fee revenues, which include contributions from net new business, internal growth and acquisition-related synergies.
Revenues for fiscal 2021, 2020 and 2019 came in at $4.99 billion, $4.53 billion and $4.36 billion, respectively, representing growth of 10%, 4% and 1%, respectively, from the respective previous fiscal year’s reported numbers. For fourth-quarter fiscal Broadridge’s recurring fee revenues of $1.2 billion increased 15% from the year-ago fiscal quarter’s level.
Broadridge continues boosting internal growth with strategic acquisitions. The 2021 acquisition of Itiviti expands BR’s back-office capabilities into the front office and strengthens its multi-asset class solutions. Also, the transaction of AdvisorStream is helping BR boost revenues and growth by providing personalized and consistent client communications.
Favorable Estimate Revision
Driven by the above tailwinds, the Zacks Consensus Estimate for current-year earnings has moved 1.3% north to $7.07 in the past 60 days.
Investors interested in the broader Zacks Business Services sector can also consider some other top-ranked stocks like Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank #1(Strong Buy) at present. CAR has an earnings growth rate of 108.4% for 2022.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank of 2 at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.
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Why Broadridge (BR) Gained 22.1% in the Past 3 Months?
Shares of Broadridge Financial Solutions, Inc. (BR - Free Report) have rallied 22.1% in the past three-month period, primarily on strong shareholder-friendly measures, a solid business model and strategic acquisitions.
Image Source: Zacks Investment Research
Reasons for Upside
We are impressed with Broadridge’s endeavors in rewarding its shareholders through share repurchases and dividend payments. In fiscal 2021, BR returned $261.7 million of dividends. In fiscal 2020, BR returned $241 million of dividends. In fiscal 2019, Broadridge returned $466.2 million through a combination of dividend payments of $211.2 million and share repurchases worth $225 million. Such moves highlight BR’s commitment to creating value for its shareholders and underline its confidence in its business. Besides, these moves instill investors’ confidence in the stock and contribute to earnings per share.
We believe that Broadridge has a strong business model. BR generates recurring revenues and a good percentage of its business comes from recurring fee revenues, which include contributions from net new business, internal growth and acquisition-related synergies.
Revenues for fiscal 2021, 2020 and 2019 came in at $4.99 billion, $4.53 billion and $4.36 billion, respectively, representing growth of 10%, 4% and 1%, respectively, from the respective previous fiscal year’s reported numbers. For fourth-quarter fiscal Broadridge’s recurring fee revenues of $1.2 billion increased 15% from the year-ago fiscal quarter’s level.
Broadridge continues boosting internal growth with strategic acquisitions. The 2021 acquisition of Itiviti expands BR’s back-office capabilities into the front office and strengthens its multi-asset class solutions. Also, the transaction of AdvisorStream is helping BR boost revenues and growth by providing personalized and consistent client communications.
Favorable Estimate Revision
Driven by the above tailwinds, the Zacks Consensus Estimate for current-year earnings has moved 1.3% north to $7.07 in the past 60 days.
Zacks Rank and Other Stocks to Consider
Broadridge currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Investors interested in the broader Zacks Business Services sector can also consider some other top-ranked stocks like Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank #1(Strong Buy) at present. CAR has an earnings growth rate of 108.4% for 2022.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank of 2 at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.