Critical Survey: Broadridge Financial Solutions (BR) versus TheStreet (NASDAQ:TST)

Broadridge Financial Solutions (NYSE: BR) and TheStreet (NASDAQ:TST) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitabiliy, valuation, institutional ownership and analyst recommendations.

Dividends

Broadridge Financial Solutions pays an annual dividend of $1.32 per share and has a dividend yield of 1.8%. TheStreet does not pay a dividend. Broadridge Financial Solutions pays out 51.6% of its earnings in the form of a dividend. TheStreet has raised its dividend for 9 consecutive years.

Earnings & Valuation

This table compares Broadridge Financial Solutions and TheStreet’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Broadridge Financial Solutions $3.77 billion 2.34 $660.00 million $2.56 29.32
TheStreet $62.38 million 0.48 $1.36 million ($0.38) -2.18

Broadridge Financial Solutions has higher revenue and earnings than TheStreet. TheStreet is trading at a lower price-to-earnings ratio than Broadridge Financial Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

85.2% of Broadridge Financial Solutions shares are owned by institutional investors. Comparatively, 49.6% of TheStreet shares are owned by institutional investors. 3.5% of Broadridge Financial Solutions shares are owned by insiders. Comparatively, 9.7% of TheStreet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Broadridge Financial Solutions and TheStreet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Broadridge Financial Solutions 0 3 1 0 2.25
TheStreet 0 0 2 0 3.00

Broadridge Financial Solutions currently has a consensus price target of $74.75, suggesting a potential downside of 0.41%. TheStreet has a consensus price target of $2.05, suggesting a potential upside of 146.99%. Given TheStreet’s stronger consensus rating and higher possible upside, analysts clearly believe TheStreet is more favorable than Broadridge Financial Solutions.

Profitability

This table compares Broadridge Financial Solutions and TheStreet’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%
TheStreet -21.87% -1.30% -0.71%

Volatility & Risk

Broadridge Financial Solutions has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, TheStreet has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Summary

Broadridge Financial Solutions beats TheStreet on 10 of the 16 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.

About TheStreet

TheStreet, Inc. (TheStreet) is a digital financial media company focused on the financial, and mergers and acquisitions environment. The Company’s collection of digital services provides users, subscribers and advertisers with a range of content and tools through a range of online, social media, tablet and mobile channels. With a suite of digital services, TheStreet offers the tools and insights needed to make informed decisions about earning, investing, saving and spending money. TheStreet provides interactive multimedia coverage of the financial markets, economy, industry trends, investment and financial planning. Its subscription products are designed to address the needs of investors with various areas of interest, including fledgling investors, day and swing traders, and fundamental, technical and options traders. Its RateWatch business publishes bank rate market information on a subscription basis to financial institutions and government agencies.

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