Mondo Visione  Sep 22  Comment 
Large banks spend between $6 billion and $9 billion processing standardized trades each year, and could reduce those costs by up to 40 percent by adopting a "utility" model, according to a new study by Broadridge Financial Solutions, Inc....
Benzinga  Sep 16  Comment 
Analysts at Barclays initiated coverage of Broadridge Financial Solutions, Inc. (NYSE: BR) with a Overweight rating. The target price for Broadridge Financial is set to $61. Broadridge Financial shares closed at $52.87 on Tuesday. Analysts at...
Reuters  Aug 31  Comment 
BR Partners, the Brazilian investment bank founded by dealmaker Ricardo Lacerda, is countering the impact of Brazil's worst recession in 25 years by carving out a greater role...
Reuters  Jul 6  Comment 
BR Home Centers SA on Monday requested regulatory permission to go public, and will sell shares in the Brazilian construction materials retailer once market conditions...
The Economic Times  Jul 6  Comment 
'I come from the BR Chopra school of film-making wherein it is believed that every film must have a message for the society.'
The Economic Times  Jun 21  Comment 
RSS Joint General Secretary Krishna Gopal speaks on Ambedkar’s economic thinking and how he has not been fully understood.
Telecom Ramblings  Jun 15  Comment 
With us today to offer his perspective is euNetworks’ CEO Brady Rafuse, who previously stopped by a few years ago.  Since that time, euNetworks has expanded is pan-European fiber footprint organically and made three acquisitions as well.  The...
Mondo Visione  Jun 15  Comment 
Broadridge Financial Solutions, Inc. (NYSE: BR) today announced that Portigon Financial Services, an international portfolio service provider with branches in Dusseldorf, London and New York, is now live on Broadridge's global post-trade...
Mondo Visione  May 20  Comment 
Broadridge Financial Solutions, Inc. (NYSE:BR) today announced the appointments of Liz Pedersen as senior vice president of wealth managed services and Traci Mabrey as head of wealth solutions. In her new role, Pedersen will oversee wealth...


Broadridge Financial Solutions (NYSE: BR) provides outsourced record keeping to the financial industry. This system frees companies from the complex requirements set forth by regulatory agencies, such as the SEC, regarding disclosure filings and securities transactions. In addition, the company processes security transactions.

The decline in trading volumes and the reduction in market liquidity associated with the current financial crisis threatens Broadridge’s earnings. Moreover, as the company serves eight of the top 10 broker-dealers, [1] further consolidation in financial services poses a significant risk by decreasing the number of company clients. However, Broadridge stands to benefit from increased compliance revenues (due to more required filings and disclosures) brought on by recent government intervention in the financial markets. [2]

Business Overview

Broadridge offers a complete portfolio of outsourcing services to the financial services industry, including investor communications such as proxy mailing and vote processing, automated security processing, and transaction services. The company’s clients include broker-dealers (companies that trade securities for clients and internal profit), mutual funds, institutional investors, trading companies, and annuity companies.[1]


Previously, Broadridge formed the Brokerage Services division of ADP, a company that specializes in payroll processing. However, on March 29, 2007, Broadridge spun-off from ADP to form a new company. In the spinoff, ADP charged Broadridge with more than $600 million in debt. [3] To address this issue, management has focused on shareholder returns by decreasing the company’s debt and increasing the dividend ratio.[4]

Business & Financial Metrics[5]

In 2009, BR generated a net income of $190.0 million on revenues of $2.21 billion. This represents a 14.9% decrease in net income and a 6.6% increase in revenues from 2008, when the company earned $223.3 million on $2.07 billion in revenue.

Business Segments[6]

Investor Communication Solutions - 75.7% of FY2009 revenues

The Investor Communications Segment processes and distributes proxy materials, documents mandated by the SEC to inform shareholders about important events, to equity owners and mutual funds. These materials are provided in both electronic and paper formats. In addition, Broadridge supplies other regulatory documents, including tax information and important event disclosure documents, as well as account statements and trade records.

Due to the legal necessity and consistent flow of these documents, this segment provides indispensable services. At all stages in the economic cycle, companies file reorganization documents, implement institutional changes, and deal with regulatory agencies. All of these factors positively impact the Investor Communications segment.

Securities Processing Solutions – 24.3% of FY2009 revenues

The Securities Processing segment records, manages, and archives the trading of stocks, options, mutual funds, and fixed income securities.

Key Trends & Forces

Broadridge stands to benefit from increased regulatory scrutiny in the era of government bailouts

As an outsourcing company for the financial services industry, Broadridge deals heavily with regulatory agencies. These agencies dictate the necessary documents, such as proxy materials and notifications of important events, that a publicly trade company must disclose. Since Broadridge handles these documents, the company’s revenues can be significantly altered by fluctuations in regulatory demands.

With the passage of a $700 billion bailout of financial services on October 3rd, 2008, the US government has assumed a new importance in the financial markets. [7] Moreover, European governments seem to be following suit, as the British passed a $850 billion bailout on October 8th, 2008. [8] In the past, increased government involvement has led to greater regulation. For example, after the accounting scandals in 2002 involving Enron and Tyco the government intervened by way of the Sarbanes-Oxley Act. The Act significantly increased regulatory disclosures and compliance costs for public companies. [9] Broadridge stands to gain from the additional documentation and regulatory demands implemented by government agencies.

Broadridge faces a decline in revenues due to decreases in trading volume and low market liquidty

All three of Broadridge’s segments generate transaction processing fees. In addition, interest earned from margin lending also generates substantial revenue. However, when trading volumes are down, share prices are low, and liquidity is non-existent, [10] Broadridge is impacted in the following ways:

  • Reduced one-time revenues from mergers and acquisitions, investor communications, and mutual fund disclosures
  • Less margin lending
  • Lower trading activity and processing fees
  • Increased litigation claims due to failure of buyers and sellers to fulfill contracts
  • Fewer security purchases


Broadridge competes against firms' in-house capacities (firms deciding to hire personnel in-house rather than outsource financial record keeping) as well as other outsourcing firms. These firms provide sensitive information and services. Due to the importance of these products, outsourcing firms need a long record of trusted service. This leads to lengthy relationships between firms and clients. The following firms compete with Broadridge:

DST Systems

DST competes with Broadridge in information processing and computer software services. DST also provides statement and billing solutions, similar to Broadridge’s investor communications segment.[11]

State Street

State Street offers investment operations outsourcing, recordkeeping, and transfer agency services that directly compete with Broadridge.[12]


Fiserv also competes in the processing of financial transactions.[13]

Fidelity National Information Services

FIS and Broadridge compete in the financial institution processing and outsourcing market.[14]


  1. 1.0 1.1 Broadridge 10-K, page 7
  2. Bernanke's Comments on Government Intervention
  3. Broadridge 10-K, page 56
  4. Broadridge 10-K, page 57
  5. BR 2009 10-K pg. 24  
  6. BR 2009 10-K pg. 33  
  7. Bailout Text
  8. Britain Bailout
  9. Company's Sarbox costs
  10. Recession Characteristics
  11. DST 2007 10-K
  12. State Street 2007 10-K
  13. Fiserv 2007 10-K
  14. FIS 2007 10-K
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