Broadridge Financial Solutions, Inc. (NYSE:BR) is a provider of technology solutions including investor communications, securities processing and operations to banks, broker-dealers, mutual funds, and corporate issuers globally.
It is the former Brokerage Services division of ADP and was spun-off from ADP in 2007. The company has seen a compounded annual fee growth of 6% since it was spun-off.
BR processes 85% of all outstanding shares voted in the US and 72% of shares voted outside of the US.
Solid Third Quarter Results
Broadridge Financial Solutions, Inc. (NYSE:BR) reported financial results for the first quarter of its fiscal year 2014 on November 7, 2013. Total Revenues increased 10% to $545 million from $496 million, primarily due to growth in net new business and by internal growth.
Non-GAAP Diluted earnings increased 117% to $0.39 per share, substantially ahead of the Zacks Consensus Estimate of $0.20 per share.
The management reaffirmed their full year guidance provided in August 2013–total revenue growth in the range of 2% to 4% and diluted earnings per share in the range of $2.00 to $2.10.
Earnings Estimates Revisions
After excellent results and reaffirmation of guidance, analysts have increased their estimates for BR.
Zacks Consensus Estimate for the current and next fiscal year are now at $2.29 per share and $2.47 per share respectively, up from $2.06 per share and $2.26 per share, 60 days ago. Rising estimates sent Broadridge Financial Solutions, Inc. (NYSE:BR) to Zacks Rank # 1 (Strong Buy) on November 14, 2013.
Shareholder Value Creation
The company plans to pay out 40% of its net earnings in dividends. It also plans using its excess cash for buybacks. Since its inception in 2007, the company has returned over $800 million of capital to its shareholders via dividends and buybacks.
Broadridge Financial Solutions, Inc. (NYSE:BR) is a Zacks Rank #1 (Strong Buy) stock. It also has a longer-term Zacks recommendation of “Outperform”. Further Zacks Industry Rank of 31 out of 265 (top 12%) suggests strong chances of outperformance in the coming months.
With its leadership position in a number of attractive markets in the investor communications and securities processing space and a diversified revenue base across large financial institutions, the company should continue to reward its investors in the coming months.
Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.