Should You Be Adding Broadridge Financial Solutions (NYSE:BR) To Your Watchlist Today?
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The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
In contrast to all that, many investors prefer to focus on companies like Broadridge Financial Solutions (NYSE:BR), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
View our latest analysis for Broadridge Financial Solutions
Broadridge Financial Solutions' Improving Profits
Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Broadridge Financial Solutions has grown its trailing twelve month EPS from US$4.48 to US$4.70, in the last year. That's a fair increase of 5.1%.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Broadridge Financial Solutions maintained stable EBIT margins over the last year, all while growing revenue 14% to US$5.5b. That's encouraging news for the company!
In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Broadridge Financial Solutions' forecast profits?
Are Broadridge Financial Solutions Insiders Aligned With All Shareholders?
Owing to the size of Broadridge Financial Solutions, we wouldn't expect insiders to hold a significant proportion of the company. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth US$109m. While that is a lot of skin in the game, we note this holding only totals to 0.6% of the business, which is a result of the company being so large. This should still be a great incentive for management to maximise shareholder value.