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Broadridge Buys TD Ameritrade's Custody and Trust Assets

Zacks Equity Research

Broadridge Financial Solutions, Inc. BR recently announced that it has completed the acquisition of retirement plan custody and trust assets from TD Ameritrade Trust Company, a subsidiary of TD Ameritrade Holding Corporation AMTD. The deal was announced on Apr 17, 2019.

So far this year, we observe that shares of Broadridge have gained 36.2% compared with 28.3% rise of the industry it belongs to and 16.9% increase of the Zacks S&P 500 composite.


Expands Retirement Plan Platform

The acquisition should strengthen Broadridge’s mutual fund and retirement business and enhance its position as one of the leading providers of custodial and sub-custodial solutions.

It is part of Broadridge’s efforts to expand Matrix Financial Solutions, the company’s subsidiary, through which it offers mutual fund trade processing services. It will bring additional features like directed trustee, custody, mutual fund and ETF trading services offerings to this subsidiary.

Further, the buyout will expand Broadridge's offerings for the growing qualified and non-qualified retirement plan services market and help it provide enhanced support to brokers, financial advisors, record keepers, banks, and third-party administrators.

All these should open up ample client acquisition and retention opportunities for Broadridge.

With this deal, Broadridge now serves roughly $420 billion in assets under administration and more than 118,000 plan accounts in custody.

The move should help Broadridge strengthen its Investor Communication Solutions segment. Third-quarter fiscal 2019 revenues from the segment increased 19% from the year-ago level to $1 billion.

Zacks Rank & Other Stocks to Consider

Broadridge currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few other top-ranked stocks in the broader Zacks Business Services sector are FLEETCOR Technologies FLT and NV5 Global NVEE, each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rate for FLEETCOR and NV5 Global is 15.4% and 20%, respectively.

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TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
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