Here's Why You Should Retain Broadridge Stock in Your Portfolio

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BR’s first-quarter fiscal 2027 earnings are expected to be down 9.3% year over year. Earnings for fiscal 2027 and 2028 are projected to rise 9.8% and 10.2% year over year, respectively. Revenues are expected to increase 5.02% in fiscal 2027 and 5.34% in fiscal 2028.

Factors That Bode Well for BR

Broadridge’s collaboration with Payward Services is a positive development that strengthens its position in digital asset governance by extending proxy voting and shareholder communications to eligible xStocks holders. The initiative bridges traditional shareholder rights with blockchain-based ownership, potentially expanding Broadridge’s addressable market as tokenized securities gain adoption. With xStocks already supporting more than 500 tokenized assets across equities, ETFs and pre-IPO offerings, the partnership could drive additional demand for Broadridge’s governance, reporting and proxy infrastructure while reinforcing its role in the evolving tokenized securities market.

The company’s expanded agreement with Raiffeisen Bank International is also a positive development that strengthens its recurring technology and solutions business. The deployment of BRx Match will enable CRISP to manage a projected fourfold increase in transaction volumes across 14 markets while improving automation, exception management and regulatory compliance through ISO 20022 support. The cloud-based platform should help BR deepen its relationship with a long-standing client and generate opportunities for further adoption, as financial institutions modernize reconciliation infrastructure and scale operations across global markets.

Broadridge has demonstrated a strong commitment to its shareholders through consistent dividend payments, despite the fluctuations in its cash position. BR paid dividends of $331 million, $368.2 million and $402.3 million in fiscal 2023, 2024 and 2025, respectively. This consistency underscores its dedication to creating long-term value for investors. At the end of fiscal 2026, the company paid dividends worth $443.5 million.

In the first quarter of fiscal 2027, the board of directors increased Broadridge’s annual dividend by 12% to $4.36 per share and declared a quarterly dividend of $1.09 per share. The board also authorized a new $1.5 billion share repurchase program, replacing the remaining authorization under the previous plan. These actions underscore Broadridge’s commitment to returning capital to shareholders while maintaining flexibility to support EPS growth through share repurchases.

Key Risks to Watch

BR is facing mounting pressure from surging expenses, which are hampering the company’s prospects. The total operating cost increased 7% year over year in 2024, 3.8% year over year in 2025 and 8.4% year over year in 2026, driven by higher distribution expenses, volume-related expenses and the impact of acquisitions and investments.

Moreover, the company operates in a highly competitive environment, with intense competition from financial technology and business process service providers pressuring pricing, innovation and client retention. Meanwhile, volatility in the macroeconomic environment, including changing interest rates, market conditions and economic uncertainty, could weigh on client spending and transaction activity, potentially hampering Broadridge’s growth prospects and financial performance.

Broadridge currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

A couple of better-ranked stocks in the Internet - Software industry are Astera Labs, Inc. ALAB and Twilio TWLO.

Astera Labs sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ALAB has an encouraging earnings surprise history. It has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 17.07%.

Twilio also sports a Zacks Rank of 1 at present. It has an encouraging earnings surprise history, surpassing the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 13.95%.

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This article originally published on Zacks Investment Research (zacks.com).

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