Broadridge Financial Solutions Inc. (BR – Free Report) stock has showcased a decent run in the past three months. Shares of the company have gained 19.1%, outpacing the Zacks S&P 500 Composite’s 15.6% growth.
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BR’s revenues are anticipated to increase 6.6% and 4.8% year over year in fiscal 2025 and 2026, respectively. Earnings are estimated to rise 10.4% in fiscal 2025 and 9.1% in fiscal 2026.
Factors That Augur Well for Broadridge’s Success
BR maintains a strong business model with substantial recurring revenue streams, which provides good visibility on its organic revenues in the near to mid-term. In the second quarter of fiscal 2025, recurring revenues accounted for 61.7% of the top line.
Highlighting its leadership in the buy-side market, Broadridge earned two prestigious awards in the Chartis Research Buyside Platforms 2024 Rankings, including Outsourced Operations and Managed Services. This recognition underscores Broadridge’s key role in helping buy-side firms navigate operational transformation and adapt to emerging asset classes. Its integrated investment management platform enhances efficiency, scalability and digital transformation across a wide range of buy-side institutions.
BR’s partnership expansion with Investor Communications Japan (ICJ) to enhance electronic proxy voting services is encouraging as the company prepares for Japan’s JASDEC2025 initiative. This collaboration aims to digitalize data processing and improve security, ensuring readiness for changes in Japan’s securities infrastructure. By utilizing Broadridge’s JASDEC Processing Solution, ICJ will streamline proxy voting data management and reduce administrative risks. With JASDEC2025 set to launch by Q1 2026, this strategic move enables Broadridge to stay ahead of market shifts while strengthening corporate governance and shareholder engagement.
The acquisition of Kyndryl’s Securities Industry Services business on Nov. 1, 2024, is a significant move for the company, enhancing its capabilities in wealth management, capital markets and IT solutions in Canada. This deal strengthens the company’s Global Technology and Operations segment, expanding its product offerings and positioning it to better serve the Canadian market. The $185 million purchase price reflects a strategic investment to enhance its competitive edge in the financial services and technology sectors, potentially opening up new growth opportunities and increasing market share in the region.
Broadridge has demonstrated a consistent commitment to returning value to its shareholders through reliable dividend payments. In fiscal years 2023, 2022 and 2021, the company paid dividends of $331.0 million, $290.7 million and $261.7 million, respectively. On Aug. 5, 2024, Broadridge’s board of directors approved a 10% increase in the annual dividend, raising it from $3.20 to $3.52 per share, subject to the board’s discretion to declare quarterly dividends. This marks the 18th consecutive year of dividend increases since the company went public in 2007. In fiscal 2024, Broadridge paid a total of $368.2 million in dividends.
BR: Key Risks to Watch
Broadridge faces intense competition from companies like DST Systems Inc., as well as numerous others in the sectors of compiling, printing and distributing transaction confirmations, account statements and other customer communications. This competitive pressure forces Broadridge to constantly innovate and differentiate its offerings while managing costs. As a result, the company must continuously invest in technology and talent to maintain its competitive edge, making it challenging to balance growth with profitability.
Broadridge’s Zacks Rank & Stocks to Consider
BR has a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader Zacks Business Services sector are Maximus (MMS – Free Report) and Booz Allen Hamilton (BAH – Free Report) .
Maximus currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MMS has an encouraging earnings surprise history, having outpaced the Zacks Consensus estimate in three of the trailing four quarters and missed once. The average beat being 13.3%.
Booz Allen Hamilton currently carries a Zacks Rank #2 (Buy).
BAH has an encouraging earnings surprise history, having outpaced the Zacks Consensus estimate in three of the trailing four quarters and missed once. The average beat being 6.7%.
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