BROADRIDGE FINANCIAL SOLUTIONS (NYSE:BR) – A Quality Stock Worth Considering

BROADRIDGE FINANCIAL SOLUTIONS (NYSE:BR) was identified by our Caviar Cruise stock screener as a potential candidate for quality investors. The company demonstrates strong financial metrics, consistent growth, and efficient capital allocation, making it a compelling option for long-term investors. Below, we examine why BR fits the criteria of a quality investment.

Key Strengths of BROADRIDGE FINANCIAL SOLUTIONS

• High Return on Invested Capital (ROIC): BR’s ROIC (excluding cash and goodwill) stands at 46.49%, well above the 15% threshold required by the Caviar Cruise screen. This indicates efficient use of capital to generate profits.
• Strong Revenue and EBIT Growth: Over the past five years, revenue has grown at a 5.74% annual rate, while EBIT growth has been even stronger at 9.28%, signaling improving profitability.
• Healthy Debt Management: The company’s debt-to-free cash flow ratio is 3.19, meaning it could repay its debt in just over three years using current cash flows—a sign of financial stability.
• High Profit Quality: BR converts 105.79% of its net income into free cash flow, exceeding the 75% benchmark, which suggests earnings are backed by real cash generation rather than accounting adjustments.

Fundamental Analysis Summary

The fundamental report highlights BR’s strengths in profitability, with high returns on equity (33.10%) and assets (9.50%). While the valuation appears expensive with a P/E of 28.13, this is justified by the company’s strong growth prospects and reliable dividend history, with an 11.36% annual dividend growth rate over the past decade.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.