Broadridge Financial Solutions (BR) and IHS (IHS) Critical Analysis
Broadridge Financial Solutions (NYSE: BR) and IHS (NYSE:IHS) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitabiliy and earnings.
Earnings & Valuation
This table compares Broadridge Financial Solutions and IHS’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Broadridge Financial Solutions||$3.77 billion||2.35||$660.00 million||$2.56||29.44|
Broadridge Financial Solutions has higher revenue and earnings than IHS. Broadridge Financial Solutions is trading at a lower price-to-earnings ratio than IHS, indicating that it is currently the more affordable of the two stocks.
This table compares Broadridge Financial Solutions and IHS’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Broadridge Financial Solutions||8.21%||34.74%||11.62%|
Broadridge Financial Solutions pays an annual dividend of $1.32 per share and has a dividend yield of 1.8%. IHS does not pay a dividend. Broadridge Financial Solutions pays out 51.6% of its earnings in the form of a dividend. IHS has raised its dividend for 9 consecutive years.
Insider & Institutional Ownership
84.9% of Broadridge Financial Solutions shares are owned by institutional investors. 3.5% of Broadridge Financial Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of current recommendations for Broadridge Financial Solutions and IHS, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Broadridge Financial Solutions||0||2||1||0||2.33|
Broadridge Financial Solutions presently has a consensus target price of $75.00, suggesting a potential downside of 0.48%. IHS has a consensus target price of $64.00, suggesting a potential downside of 45.42%. Given Broadridge Financial Solutions’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Broadridge Financial Solutions is more favorable than IHS.
Volatility & Risk
Broadridge Financial Solutions has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, IHS has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
Broadridge Financial Solutions beats IHS on 10 of the 13 factors compared between the two stocks.
About Broadridge Financial Solutions
Broadridge Financial Solutions, Inc. (Broadridge) is a provider of investor communications and technology-driven solutions to banks, broker-dealers, mutual funds and corporate issuers. The Company’s segments include Investor Communication Solutions, and Global Technology and Operations. The Company offers Bank/Broker-Dealer Investor Communication Solutions, Customer Communication Solutions, Corporate Issuer Solutions, Advisor Solutions and Mutual Fund and Retirement Solutions through Investor Communication Solutions segment. The Company offers a middle- and back-office securities processing platform for North American and global broker-dealers. Its services include investor and customer communications, securities processing, and data and analytics solutions. The Company delivers a range of solutions that helps its clients serve their retail and institutional customers across the entire investment lifecycle, including pre-trade, trade, and post-trade processing functionality.
IHS Inc. develops source of information, insight and analytics in different areas of business. The Company’s segments include Resources, Transportation and Consolidated Markets & Solutions. The Company’s Resources segment includes its Energy and Chemicals product offerings. Its Transportation segment includes its Automotive; Maritime & Trade, and Aerospace, Defense & Security product offerings. Its Consolidated Markets & Solutions segment includes its Product Design; Technology, Media & Telecom, and Economics & Country Risk product offerings. It provides authoritative analysis and forecasts of sales and production for light vehicles, medium and heavy commercial vehicles, powertrain, components and technology systems across various markets. Its product design offerings include content and analysis on various engineering and technical standards, codes, reference books, journals, and other scientific and technical documents, as well as software-based engineering decision engines.
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