Broadridge Financial Solutions, Inc. BR has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of quality and sustainability of its growth.
The company’s earnings for fiscal 2021 and fiscal 2022 are expected to grow 10.1% and 9.2%, respectively. The stock has gained a massive 57.1% over the past year.
Factors That Auger Well
Broadridge has a consistent track record of rewarding shareholders through dividends. During fiscal 2020, the company paid cash dividends of $241 million. It paid out $211.2 million, $165.8 million and $152.2 million of dividends during fiscal years 2019, 2018 and 2017, respectively.
The company’s 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 2021, recurring-fee revenues of $696.2 million increased 7% year over year and contributed 67% to total revenues.
Broadridge’s total-debt-to-total-capital ratio of 0.56 was higher than the industry’s 0.39 at the end of the fiscal second quarter. A high debt-to-capitalization ratio indicates higher risk of insolvency in challenging times.
Further, the company’s cash and cash equivalent of $366 million at the end of the quarter was well below the debt level of $1.8 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. Broadridge, however, has no short-term debt to clear off.
Zacks Rank and Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocksin the broader Zacks Business Services sector are Gartner IT, Cross Country Healthcare CCRN and Charles River Associates CRAI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for Gartner, Cross Country Healthcare and Charles River is pegged at 13.5%, 12% and 13%, respectively.
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Charles River Associates (CRAI) : Free Stock Analysis Report
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