In a sliding market, Broadridge has defied the odds, trading up to $239.01 per share. Its 11.2% gain since September 2024 has outpaced the S&P 500’s 1.4% drop. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is it too late to buy BR? Find out in our full research report, it’s free.
Why Does BR Stock Spark Debate?
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Two Positive Attributes:
1. Long-Term Revenue Growth Shows Strong Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Broadridge grew its sales at a solid 9% compounded annual growth rate. Its growth beat the average business services company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Broadridge’s EPS grew at a spectacular 12.8% compounded annual growth rate over the last five years, higher than its 9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
One Reason to be Careful:
Previous Growth Initiatives Haven’t Impressed
Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).
Although Broadridge has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 14%, somewhat low compared to the best business services companies that consistently pump out 25%+.
Final Judgment
Broadridge has huge potential even though it has some open questions, and with its shares topping the market in recent months, the stock trades at 27.4× forward price-to-earnings (or $239.01 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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