Broadridge Financial Solutions (NYSE: BR) and TransUnion (NYSE:TRU) are both mid-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.
This table compares Broadridge Financial Solutions and TransUnion’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Broadridge Financial Solutions||7.89%||37.99%||12.30%|
Volatility and Risk
Broadridge Financial Solutions has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, TransUnion has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.
This is a breakdown of recent ratings for Broadridge Financial Solutions and TransUnion, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Broadridge Financial Solutions||0||3||0||0||2.00|
Broadridge Financial Solutions currently has a consensus price target of $74.00, indicating a potential downside of 7.14%. TransUnion has a consensus price target of $47.38, indicating a potential upside of 5.42%. Given TransUnion’s stronger consensus rating and higher probable upside, analysts plainly believe TransUnion is more favorable than Broadridge Financial Solutions.
Insider & Institutional Ownership
83.8% of Broadridge Financial Solutions shares are owned by institutional investors. 3.5% of Broadridge Financial Solutions shares are owned by insiders. Comparatively, 2.1% of TransUnion shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Broadridge Financial Solutions pays an annual dividend of $1.46 per share and has a dividend yield of 1.8%. TransUnion does not pay a dividend. Broadridge Financial Solutions pays out 53.5% of its earnings in the form of a dividend. TransUnion has raised its dividend for 9 consecutive years.
Earnings & Valuation
This table compares Broadridge Financial Solutions and TransUnion’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Broadridge Financial Solutions||$4.14 billion||2.24||$704.70 million||$2.73||29.19|
|TransUnion||$1.80 billion||4.54||$636.70 million||$1.16||38.74|
Broadridge Financial Solutions has higher revenue and earnings than TransUnion. Broadridge Financial Solutions is trading at a lower price-to-earnings ratio than TransUnion, indicating that it is currently the more affordable of the two stocks.
Broadridge Financial Solutions beats TransUnion on 9 of the 17 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.
TransUnion is a risk and information solutions provider to businesses and consumers. The Company provides consumer reports, risk scores, analytical services and decision capabilities to businesses. The Company operates through three segments: U.S. Information Services (USIS), International and Consumer Interactive. The USIS segment provides consumer reports, risk scores, analytical services and decisioning capabilities to businesses. The International segment provides services similar to its USIS segment to businesses in select regions outside the United States. The Consumer Interactive segment offers solutions that help consumers manage their personal finances and take precautions against identity theft. Businesses uses its solutions for their process workflows to assess consumer ability to pay for services, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud.
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