Reviewing Broadridge Financial Solutions (NYSE:BR) and Envestnet (NYSE:ENV)
Broadridge Financial Solutions (NYSE:BR) and Envestnet (NYSE:ENV) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
Insider & Institutional Ownership
86.0% of Broadridge Financial Solutions shares are held by institutional investors. Comparatively, 95.8% of Envestnet shares are held by institutional investors. 2.2% of Broadridge Financial Solutions shares are held by company insiders. Comparatively, 2.4% of Envestnet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Broadridge Financial Solutions and Envestnet’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Broadridge Financial Solutions||9.50%||46.99%||12.42%|
Risk and Volatility
Broadridge Financial Solutions has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Envestnet has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500.
This is a summary of recent ratings for Broadridge Financial Solutions and Envestnet, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Broadridge Financial Solutions||0||1||4||0||2.80|
Broadridge Financial Solutions presently has a consensus price target of $133.60, indicating a potential upside of 15.62%. Envestnet has a consensus price target of $74.50, indicating a potential upside of 18.74%. Given Envestnet’s higher probable upside, analysts clearly believe Envestnet is more favorable than Broadridge Financial Solutions.
Valuation and Earnings
This table compares Broadridge Financial Solutions and Envestnet’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Broadridge Financial Solutions||$4.36 billion||3.04||$482.10 million||$4.66||24.80|
|Envestnet||$900.13 million||3.73||-$16.78 million||$1.21||51.85|
Broadridge Financial Solutions has higher revenue and earnings than Envestnet. Broadridge Financial Solutions is trading at a lower price-to-earnings ratio than Envestnet, indicating that it is currently the more affordable of the two stocks.
Broadridge Financial Solutions beats Envestnet on 8 of the 14 factors compared between the two stocks.
About Broadridge Financial Solutions
Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions for the financial services industry worldwide. The company's Investor Communication Solutions segment processes and distributes proxy materials to investors in equity securities and mutual funds, as well as facilitates related vote processing services; and offers ProxyEdge, an electronic proxy delivery and voting solution. It also provides registered proxy, registrar, stock transfer, and record-keeping services to corporations; and distributes regulatory reports and corporate action/reorganization event information, and tax reporting solutions. In addition, this segment offers customer communication solutions, including processing and distributing its clients' transactional, regulatory, and marketing communications through print and digital channels. Further, it provides cloud-based marketing and customer communication tools, as well as customer and account data aggregation and reporting services; and creates sales and educational content, including seminars and a library of financial planning topics, as well as customizable advisor Websites, search engine marketing, and electronic and print newsletters. Additionally, this segment offers mutual fund and retirement, and mutual fund trade processing services. The company's Global Technology and Operations segment offers middle- and back-office securities processing solutions that include desktop productivity tools, data aggregation, performance reporting, portfolio management, order capture and execution, trade confirmation, margin, cash management, clearance and settlement, asset servicing, reference data management, reconciliation, securities financing and collateral optimization, compliance and regulatory reporting, and accounting. It also provides international securities processing and managed services. The company was founded in 1962 and is headquartered in Lake Success, New York.
Envestnet, Inc., together with its subsidiaries, provides intelligent systems for wealth management and financial wellness in the United States and internationally. It operates through Envestnet and Envestnet | Yodlee segments. The company's product and services suites include Envestnet | Enterprise, which provides an end-to-end open architecture wealth management platform, as well as sells data aggregation and reporting, data analytics, and digital advice capabilities; Envestnet | Tamarac that provides trading, rebalancing, portfolio accounting, performance reporting, and client relationship management software; Envestnet | Retirement Solutions, which offer a suite of services for advisor-sold retirement plans; and Envestnet | Portfolio Management Consultants that provide research, due diligence, and consulting services to assist advisors in creating investment solutions for their clients, and patented portfolio overlay and tax optimization services. It also provides Envestnet | Yodlee data aggregation and data analytics platform, which offers cloud-based innovation for digital financial services. The company primarily serves banks, wealth management and brokerage firms, Internet services companies, and registered investment advisers. Envestnet, Inc. was founded in 1999 and is headquartered in Chicago, Illinois.
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