Updated 3/6/25

Broadridge Financial Solutions (NYSE: BR) isn’t a name most people recognize, but it plays a vital role in the financial world. The company provides essential services for banks, brokerage firms, and asset managers, helping with things like investor communications, trade processing, and data analytics. In short, it keeps the gears of the financial industry running smoothly.

For dividend investors, Broadridge offers an interesting mix of steady income, reliable growth, and strong cash flow. While the yield isn’t particularly high, the company has built a history of consistent dividend increases, making it an attractive option for long-term investors looking for compounding returns. Let’s dive into what makes this stock worth considering.

Key Dividend Metrics

📌 Dividend Yield: 1.45%
📌 Annual Dividend Per Share: $3.52
📌 5-Year Average Dividend Yield: 1.61%
📌 Payout Ratio: 52.58%
📌 Dividend Growth Rate (5-Year CAGR): ~10%
📌 Ex-Dividend Date: March 13, 2025
📌 Dividend Payment Date: April 3, 2025

The dividend yield may not be the highest out there, but Broadridge makes up for it with strong, consistent dividend growth and solid financials.

Dividend Overview

Broadridge has been paying dividends since its spin-off from ADP in 2007, and it hasn’t missed an increase since. The current yield sits at 1.45%, which is slightly below the company’s five-year average of 1.61%. This suggests that the stock price has been climbing at a faster rate than its dividend, which is a positive sign for investors who appreciate both income and capital appreciation.

With a payout ratio of 52.58%, Broadridge is distributing just over half of its earnings as dividends, leaving plenty of room for reinvestment in the business. This balance ensures that the company can continue to grow while still rewarding shareholders.

Dividend Growth and Safety

What really stands out about Broadridge is its dividend growth. Over the past five years, the company has increased its dividend at an annualized rate of around 10%. That kind of growth not only outpaces inflation but also helps income investors see their returns compound over time.

Cash flow is the foundation of any reliable dividend, and Broadridge’s numbers look strong. With free cash flow coming in at $1.07 billion and operating cash flow at $1.04 billion, the company has more than enough flexibility to maintain and grow its dividend.

Another encouraging sign is Broadridge’s return on equity (ROE), which sits at an impressive 35.34%. This shows that the company is using shareholder capital efficiently to generate profits, a great indicator of long-term financial strength.

One potential red flag is the company’s debt load. With a debt-to-equity ratio of 173.54%, Broadridge has taken on a fair amount of leverage. While its stable cash flows help offset this risk, it’s something investors should keep an eye on.

Chart Analysis

Price Trend and Moving Averages

Broadridge Financial Solutions (BR) has been in a strong uptrend over the past year, with the stock steadily climbing and making higher highs and higher lows. The 50-day simple moving average (SMA) is well above the 200-day SMA, confirming the bullish momentum. This kind of setup is typically seen in stocks that are in a well-established uptrend, with buyers consistently stepping in on pullbacks.

More recently, however, the stock appears to have hit some resistance, as the price has started to pull back from its recent peak. Despite this, BR remains above both its 50-day and 200-day moving averages, which suggests that the longer-term trend is still intact.

Volume and Market Participation

Volume has remained relatively steady throughout the trend, but there are some noticeable spikes, particularly during moments of sharp price movements. This suggests that institutional investors have been active in this stock, stepping in at key levels. However, recent volume readings appear slightly lower compared to past surges, which could indicate that buying pressure is cooling off.

Relative Strength Index (RSI)

The RSI is currently at 58.19, which places it in neutral territory. This means the stock is neither overbought nor oversold, leaving room for movement in either direction. Earlier in the trend, the RSI showed overbought conditions, but the recent pullback has helped it reset to a more balanced level. If the RSI starts to climb back toward 70, it could signal renewed strength, while a drop below 50 could indicate a weakening trend.

Support and Resistance Levels

Looking at the chart, the most recent high near 240 has acted as a resistance level, with the stock struggling to break through and sustain higher prices. If it can push above this level with strong volume, it could trigger another leg higher. On the downside, support appears to be around the 50-day SMA, which has provided a cushion in previous pullbacks. If that level fails, the next major support would likely be near the 200-day SMA, which sits closer to the 210 range.

Recent Candlestick Action

The last five candles show some signs of indecision. While there was a strong move to the upside a few days ago, the most recent candles have long upper wicks, suggesting selling pressure at higher levels. This could indicate that traders are taking profits or that there is hesitation among buyers. If this pattern continues, it may signal a consolidation phase or a potential short-term pullback before the next move.

Analyst Ratings

Recent Upgrades

📈 Morgan Stanley recently raised its price target for Broadridge Financial Solutions from $207 to $222 while maintaining an “Equal-Weight” rating. The firm cited strong earnings growth and the company’s ability to maintain stable cash flows as key factors behind the adjustment. Analysts noted that Broadridge’s expanding presence in financial technology services positions it well for long-term gains.

📊 Raymond James also revised its target price, increasing it from $205 to $214, while reiterating an “Outperform” rating. The upgrade was driven by Broadridge’s continued revenue growth and its ability to secure new contracts with large financial institutions. Analysts believe the company’s robust fundamentals support further upside potential in the stock price.

Recent Downgrades

🔻 Not all analysts are as optimistic. StockNews.com recently downgraded Broadridge from a “Buy” to a “Hold” rating. The firm expressed concerns over valuation, suggesting that much of the company’s future growth has already been priced into the stock. With the stock trading near its all-time high, analysts believe the risk-reward balance has become less favorable.

📉 DA Davidson maintained a “Neutral” rating with a price target of $215. While they acknowledged Broadridge’s strong market position, they pointed out potential headwinds, including rising expenses and increased competition in the financial technology sector. The downgrade reflects uncertainty about how much further the stock can run given its current valuation.

Consensus Price Target

💰 The consensus twelve-month price target for Broadridge Financial Solutions currently stands at $239.17. Analyst estimates range from a low of $215 to a high of $260.

📌 Of the analysts covering the stock, most have taken a neutral stance, with five recommending a “Hold” and two suggesting a “Buy”. The overall sentiment reflects confidence in the company’s fundamentals but also acknowledges that its valuation may limit near-term upside.

These mixed ratings suggest that while Broadridge remains a strong business with reliable cash flow, investors should be mindful of its current valuation and potential market risks.

Earnings Report Summary

Broadridge Financial Solutions just released its latest earnings report, and the numbers show a company that’s continuing to grow at a steady pace. The results highlight strong revenue growth, improved profitability, and strategic moves that are setting the company up for the future.

Revenue Growth on Track

The company brought in $1.59 billion in revenue for the quarter, up from $1.41 billion during the same time last year. That’s a solid increase, fueled largely by a 9% rise in recurring revenue. It’s clear that clients continue to rely on Broadridge’s services, and the business is benefiting from that loyalty. On top of that, event-driven revenue had a huge boost, reaching $125 million—a new record for the company.

Stronger Profits and Margins

Profitability is another bright spot. Operating income jumped to $210.7 million, a big leap from the $124.4 million reported a year ago. That pushed operating margins higher, reaching 13.3% compared to last year’s 8.9%. Net earnings also more than doubled, coming in at $142.4 million versus $70.3 million the previous year. The bottom line got a boost, with diluted earnings per share climbing to $1.20.

Growth Across Business Segments

Both of Broadridge’s main business units delivered growth this quarter. The Investor Communication Solutions segment pulled in $1.15 billion, up from just under a billion last year, helped by both steady recurring revenue and a spike in event-driven activity. Meanwhile, the Global Technology and Operations segment grew to $440 million in revenue, thanks to organic expansion and acquisitions.

Strategic Moves to Build the Future

Broadridge continues to expand, recently acquiring Kyndryl’s Securities Industry Services business. This deal strengthens the company’s position in wealth management and capital markets in Canada, reinforcing its long-term growth strategy.

Strong Cash Flow and Financial Position

The company remains in solid financial shape, ending the quarter with nearly $290 million in cash on hand. Cash flow from operations came in at $111.2 million, reflecting strong fundamentals and efficient operations.

Looking Ahead

Broadridge remains optimistic about the rest of the year. The company reaffirmed its full-year outlook, expecting recurring revenue growth of 6% to 8% and earnings per share growth between 8% and 12%. Sales are projected to land between $290 million and $330 million. Looking forward, Broadridge plans to keep investing in artificial intelligence, technology, and innovation to drive further growth.

Overall, it was another strong quarter for Broadridge, with consistent growth and a clear path forward. The company’s ability to maintain steady revenue streams while expanding into new opportunities continues to make it a key player in the financial services space.

Financial Health and Stability

Broadridge operates in a business that’s largely recession-resistant. Financial institutions rely on its services regardless of market conditions, which has helped the company grow consistently. Revenue increased by 13.1% year-over-year in the most recent quarter, highlighting strong demand for its solutions.

Profitability also looks solid, with a profit margin of 11.36% and an operating margin of 13.25%. These numbers suggest the company has good pricing power and operational efficiency.

Liquidity is another important factor for dividend investors. The company has a current ratio of 1.35, meaning it has enough short-term assets to cover its liabilities. While this isn’t the highest figure out there, it’s enough to indicate that Broadridge isn’t in any immediate financial trouble.

The main concern here remains the company’s debt. With total debt sitting at $3.87 billion, Broadridge will need to keep generating strong earnings to comfortably manage its obligations.

Valuation and Stock Performance

Broadridge’s stock has been on a strong run, currently trading at $237.84, near its 52-week high of $246.58. The stock has outperformed the broader market, and its technical indicators suggest continued strength.

From a valuation standpoint, the company isn’t cheap. Its price-to-earnings (P/E) ratio sits at 37.95, well above the market average. The forward P/E of 25.71 suggests earnings growth should help bring this number down, but it’s still on the expensive side.

Another key valuation metric, the PEG ratio, sits at 1.96. This suggests the stock isn’t in deep value territory, but its growth prospects justify a premium valuation.

Broadridge also has a beta of 1.06, meaning its stock tends to move in line with the broader market but isn’t excessively volatile. For income investors who prefer stability, this is a plus.

Risks and Considerations

While Broadridge has a lot going for it, there are some risks that dividend investors should be aware of.

1️⃣ Debt Load – The company carries a significant amount of debt, and while it has the cash flow to handle it, rising interest rates could make borrowing more expensive.

2️⃣ High Valuation – With a P/E ratio well above the market average, Broadridge isn’t a bargain stock. If earnings growth slows or the market corrects, the stock price could take a hit.

3️⃣ Market Sensitivity – While Broadridge’s core services are essential, downturns in financial markets can reduce demand for some of its offerings. A prolonged bear market could have an impact on growth.

4️⃣ Regulatory Risks – The financial services industry is heavily regulated, and any major changes in compliance rules could affect Broadridge’s operations.

Despite these risks, the company’s strong business model and cash flow generation make it a relatively stable pick for long-term investors.

Final Thoughts

Broadridge Financial Solutions isn’t a high-yield stock, but for investors who prioritize dividend growth, financial stability, and steady cash flow, it’s a compelling option. The company has a long history of dividend increases, strong earnings power, and a business model that plays a critical role in financial markets.

While the stock is a bit pricey and carries some debt, these factors haven’t stopped Broadridge from consistently delivering value to shareholders. For investors who can look past the relatively low yield and focus on long-term growth, this is a stock that could fit well in a dividend portfolio.