Topic: How To Invest

Dividend Advisor Hotline – Friday, August 21, 2020

Article Excerpt

BROADRIDGE FINANCIAL SOLUTIONS INC., $136.87, New York symbol BR, is a buy. The company serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. Broadridge is now raising its quarterly dividend by 6.5% with the October 2020 payment, to $0.575 a share from $0.54. The new annual rate of $2.30 yields 1.7%. In its fiscal 2020 fourth quarter, ended June 30, 2020, the company’s revenue rose 12.4%, to $1.36 billion from $1.21 billion a year earlier. Broadridge benefited from increased mutual fund proxy activity and equity proxy contests associated with several one-time projects. Excluding one-time items, the company earned $2.15 in the latest quarter. That’s up 25.0% from $1.72. Broadridge’s higher profits came from the increased revenue; plus, proxy activity carries higher profit margins for the company. Broadridge stands to gain from cost pressures facing the financial services industry. New regulations in the U.S. (Regulation Best Interest) and Europe (Shareholder Rights Directive) also brighten its outlook. Longer term, growing consumer demand…