Reviewing Broadridge Financial Solutions (NYSE:BR) and Fiserv (NYSE:FI)

Broadridge Financial Solutions (NYSE:BR) and Fiserv (NYSE:FI) are both large-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Dividends

Broadridge Financial Solutions pays an annual dividend of $3.52 per share and has a dividend yield of 1.4%. Fiserv pays an annual dividend of $0.30 per share and has a dividend yield of 0.2%. Broadridge Financial Solutions pays out 52.9% of its earnings in the form of a dividend. Fiserv pays out 5.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Broadridge Financial Solutions has raised its dividend for 18 consecutive years. Broadridge Financial Solutions is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Broadridge Financial Solutions and Fiserv”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadridge Financial Solutions	$6.77 billion	4.24	$698.10 million	$6.65	36.72
Fiserv	$383.42 million	237.50	$3.13 billion	$5.66	29.02

Fiserv has lower revenue, but higher earnings than Broadridge Financial Solutions. Fiserv 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.

Insider and Institutional Ownership

90.0% of Broadridge Financial Solutions shares are owned by institutional investors. Comparatively, 91.0% of Fiserv shares are owned by institutional investors. 1.3% of Broadridge Financial Solutions shares are owned by company insiders. Comparatively, 0.8% of Fiserv shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Broadridge Financial Solutions and Fiserv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadridge Financial Solutions	11.36%	44.40%	12.04%
Fiserv	15.31%	17.93%	5.97%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Broadridge Financial Solutions and Fiserv, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadridge Financial Solutions	0	5	2	0	2.29
Fiserv	2	1	22	2	2.89

Broadridge Financial Solutions presently has a consensus target price of $250.83, suggesting a potential upside of 2.73%. Fiserv has a consensus target price of $220.27, suggesting a potential upside of 34.11%. Given Fiserv’s stronger consensus rating and higher probable upside, analysts clearly believe Fiserv is more favorable than Broadridge Financial Solutions.

Risk and Volatility

Broadridge Financial Solutions has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Fiserv has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

About Broadridge Financial Solutions

Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions for the financial services industry. 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 distributes regulatory reports, class action, and corporate action/reorganization event information, as well as tax reporting solutions. It also offers ProxyEdge, an electronic proxy delivery and voting solution; data-driven solutions and an end-to-end platform for content management, composition, and omni-channel distribution of regulatory, marketing, and transactional information, as well as mutual fund trade processing services; solutions for public corporations and mutual funds; data and analytics solutions; SEC filing and capital markets transaction services; registrar, stock transfer, and record-keeping services; and omni-channel customer communications solutions, as well as operates Broadridge Communications Cloud platform that creates, delivers, and manages communications and customer engagement activities. Its Global Technology and Operations segment provides solutions that automate the front-to-back transaction lifecycle of equity, mutual fund, fixed income, foreign exchange and exchange-traded derivatives, order capture and execution, trade confirmation, margin, cash management, clearing and settlement, reference data management, reconciliations, securities financing and collateral management, asset servicing, compliance and regulatory reporting, portfolio accounting, and custody-related services. This segment also offers business process outsourcing services; technology solutions, such portfolio management, compliance, fee billing, and operational support solutions; and capital market and wealth and investment management solutions. The company was founded in 1962 and is headquartered in Lake Success, New York.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides payments and financial services technology services in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through Merchant Acceptance, Financial Technology, and Payments and Network segments. The Merchant Acceptance segment provides merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, a cloud based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and Carat, an integrated operating system for large businesses. This segment distributes through various channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreement. The Financial Technology segment offers customer deposit and loan accounts, as well as manages an institution's general ledger and central information files. This segment also provides digital banking, financial and risk management, professional services and consulting, check processing, and other products and services. The Payments and Network segment offers card transactions, such as debit, credit, and prepaid card processing and services; funds access, debit payments, cardless ATM access, and surcharge-free ATM network; security and fraud protection products; card production; print services; and various network services, as well as non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. It serves merchants, banks, credit unions, other financial institutions, and corporate clients. Fiserv, Inc. was incorporated in 1984 and is headquartered in Milwaukee, Wisconsin.