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

BROADRIDGE FINANCIAL SOLUTIONS (NYSE:BR) was identified by our Caviar Cruise screener as a potential candidate for quality investors. The company demonstrates strong fundamentals, including consistent growth, high profitability, and solid financial health. Below, we examine why BR fits the criteria for a quality investment.

Key Strengths of BROADRIDGE FINANCIAL SOLUTIONS

• Revenue and EBIT Growth: Over the past five years, BR has delivered steady revenue growth (5.5% CAGR) and even stronger EBIT growth (9.3% CAGR), indicating improving operational efficiency.
• High Return on Invested Capital (ROIC): With an ROIC of 46.5% (excluding cash and goodwill), BR generates significant returns on its capital investments, outperforming many industry peers.
• Strong Profit Quality: The company converts net income into free cash flow at an impressive rate (105.8% average over five years), reflecting reliable earnings.
• Manageable Debt: BR’s debt-to-free cash flow ratio stands at 3.2, meaning it could repay its debt in just over three years using current cash flows—a sign of financial stability.
• Dividend Growth: BR has increased its dividend for at least 10 consecutive years, with an annual growth rate of 11.4%, appealing to income-focused investors.

Fundamental Analysis Summary

BR earns a solid fundamental rating of 5 out of 10, with strengths in profitability and financial health. While its valuation appears slightly expensive (P/E of 28.5), this may be justified by its strong growth prospects and high ROIC. Analysts expect continued earnings growth of 10.7% annually, reinforcing its appeal as a long-term holding.

For investors seeking high-quality businesses with durable competitive advantages, BROADRIDGE FINANCIAL SOLUTIONS presents a compelling case.

Our Caviar Cruise screener lists more quality stocks and is updated regularly.

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.