Broadridge Financial Solutions’ Earnings Soared 70% by Record Fund Activity

Broadridge Financial Solutions is a strong buy for the long run due to its robust financial performance and strategic positioning in the financial technology sector. The company has consistently demonstrated strong revenue growth with a 13.1% revenue surge that beat analyst expectations.

The firm’s EPS also increased, up 69.6%, highlighting significant improvements in profitability. The company is well-positioned to capitalize on trends such as digital transformation and global expansion, which are critical in the evolving financial services landscape.

The stock trades at 26.1 times the company’s forward earnings forecast, a justified multiple considering the revenue and earnings gains in a growing industry.

BROADRIDGE FINANCIAL SOLUTIONS INC. (New York symbol BR; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities processing, and transaction clearing.

Broadridge is best known for processing and distributing proxies and regulatory filings for nearly every publicly traded U.S. company and mutual fund, both electronically and by surface mail. That segment comprises about three-quarters of the company’s annual revenue. Fees are tied to the volume of communications that Broadridge delivers—a surge of interest from individual investors in the last few years has led to a wider group of investors holding more stocks and funds. That translates into increased business for Broadridge.

The company also has other businesses providing software to handle back-office functions for money managers, broker-dealers, and other capital markets institutions. That work includes trade processing, record-keeping, accounting, and more.

Broadridge has announced that it’s extending its strategic global agreement with Upvest, a leading provider of investment infrastructure in Europe. The deal is aimed at further delivering and enhancing Broadridge’s end-to-end proxy voting and shareholder disclosure solutions for Upvest clients and their end users.

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Upvest is one of the few fintech-centric firms in Europe that can provide its B2B clients with the full range of investment opportunities in the areas of principal broking business, proprietary trading, and safe custody business. The company was founded in 2017 by Martin Kassing and currently employs more than 170 people across its hubs in Berlin, London and Tallinn.

Broadridge Financial Solutions: Acquisition strengthens Canadian wealth management capabilities

The company continues to sign new clients to long-term contracts, which cuts its risk.
Broadridge’s revenue in its fiscal 2025 second quarter, ended December 31, 2024, rose 13.1%, to $1.59 billion from $1.41 billion a year earlier. Excluding one-time items, earnings per share jumped 69.6%, to $1.56 from $0.92.

Broadridge recently acquired Kyndryl Canada’s Securities Industry Services (SIS) wealth and capital markets technology platform for $185 million. The business provides services such as clearing and settlement, account record keeping, tax and regulatory reporting, and order management for Canadian financial services firms. It should add $60 million to the company’s annual revenue.

The shares trade at a reasonable 26.1 times the $8.52 a share Broadridge is forecast to make in 2025—given its growth prospects. As well, with the October 2024 payment, the company raised your quarterly dividend by 10.0%. Investors now receive $0.88 a share instead of $0.80. The new annual rate of $3.52 yields 1.6%.

Recommendation in Dividend Advisor: Broadridge Financial Solutions Inc. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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