Intrinsic value of Broadridge Financial Solutions - BR

Previous Close

$118.50

  Intrinsic Value

$688.48

stock screener

  Rating & Target

str. buy

+481%

Previous close

$118.50

 
Intrinsic value

$688.48

 
Up/down potential

+481%

 
Rating

str. buy

We calculate the intrinsic value of BR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  43.00
  39.20
  35.78
  32.70
  29.93
  27.44
  25.19
  23.18
  21.36
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
Revenue, $m
  5,924
  8,247
  11,198
  14,859
  19,307
  24,605
  30,804
  37,943
  46,047
  55,128
  65,189
  76,222
  88,213
  101,144
  114,994
  129,741
  145,364
  161,844
  179,167
  197,322
  216,305
  236,114
  256,755
  278,240
  300,586
  323,815
  347,956
  373,043
  399,114
  426,213
Variable operating expenses, $m
  4,829
  6,657
  8,980
  11,863
  15,365
  19,535
  24,416
  30,036
  36,416
  43,565
  51,321
  60,007
  69,448
  79,628
  90,531
  102,141
  114,440
  127,415
  141,053
  155,346
  170,290
  185,885
  202,136
  219,050
  236,642
  254,930
  273,936
  293,686
  314,210
  335,545
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  4,829
  6,657
  8,980
  11,863
  15,365
  19,535
  24,416
  30,036
  36,416
  43,565
  51,321
  60,007
  69,448
  79,628
  90,531
  102,141
  114,440
  127,415
  141,053
  155,346
  170,290
  185,885
  202,136
  219,050
  236,642
  254,930
  273,936
  293,686
  314,210
  335,545
Operating income, $m
  1,096
  1,590
  2,217
  2,996
  3,943
  5,070
  6,388
  7,907
  9,631
  11,563
  13,868
  16,215
  18,766
  21,516
  24,463
  27,600
  30,923
  34,429
  38,114
  41,976
  46,014
  50,228
  54,619
  59,190
  63,944
  68,885
  74,021
  79,357
  84,903
  90,668
EBITDA, $m
  1,487
  2,069
  2,810
  3,729
  4,845
  6,174
  7,730
  9,521
  11,554
  13,833
  16,358
  19,126
  22,135
  25,380
  28,855
  32,556
  36,476
  40,611
  44,958
  49,514
  54,277
  59,248
  64,427
  69,819
  75,426
  81,255
  87,313
  93,608
  100,149
  106,949
Interest expense (income), $m
  43
  60
  109
  174
  257
  359
  484
  632
  805
  1,005
  1,231
  1,485
  1,767
  2,075
  2,411
  2,772
  3,159
  3,572
  4,009
  4,470
  4,954
  5,462
  5,993
  6,547
  7,124
  7,725
  8,350
  8,999
  9,674
  10,376
  11,105
Earnings before tax, $m
  1,036
  1,480
  2,043
  2,740
  3,583
  4,586
  5,757
  7,102
  8,626
  10,331
  12,382
  14,448
  16,690
  19,106
  21,691
  24,440
  27,351
  30,420
  33,645
  37,022
  40,553
  44,236
  48,073
  52,066
  56,219
  60,536
  65,021
  69,683
  74,528
  79,563
Tax expense, $m
  280
  400
  552
  740
  968
  1,238
  1,554
  1,918
  2,329
  2,789
  3,343
  3,901
  4,506
  5,159
  5,856
  6,599
  7,385
  8,213
  9,084
  9,996
  10,949
  11,944
  12,980
  14,058
  15,179
  16,345
  17,556
  18,814
  20,122
  21,482
Net income, $m
  756
  1,081
  1,492
  2,000
  2,616
  3,348
  4,202
  5,184
  6,297
  7,542
  9,039
  10,547
  12,184
  13,947
  15,834
  17,841
  19,966
  22,207
  24,561
  27,026
  29,603
  32,292
  35,093
  38,008
  41,040
  44,191
  47,466
  50,869
  54,405
  58,081

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,505
  6,271
  8,515
  11,300
  14,682
  18,711
  23,425
  28,854
  35,016
  41,922
  49,573
  57,963
  67,082
  76,916
  87,448
  98,662
  110,543
  123,075
  136,249
  150,055
  164,490
  179,554
  195,251
  211,589
  228,582
  246,247
  264,606
  283,683
  303,509
  324,116
Adjusted assets (=assets-cash), $m
  4,505
  6,271
  8,515
  11,300
  14,682
  18,711
  23,425
  28,854
  35,016
  41,922
  49,573
  57,963
  67,082
  76,916
  87,448
  98,662
  110,543
  123,075
  136,249
  150,055
  164,490
  179,554
  195,251
  211,589
  228,582
  246,247
  264,606
  283,683
  303,509
  324,116
Revenue / Adjusted assets
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
  1.315
Average production assets, $m
  2,263
  3,150
  4,277
  5,676
  7,375
  9,399
  11,767
  14,494
  17,590
  21,059
  24,902
  29,117
  33,697
  38,637
  43,928
  49,561
  55,529
  61,824
  68,442
  75,377
  82,628
  90,195
  98,080
  106,288
  114,824
  123,697
  132,919
  142,502
  152,461
  162,813
Working capital, $m
  -237
  -330
  -448
  -594
  -772
  -984
  -1,232
  -1,518
  -1,842
  -2,205
  -2,608
  -3,049
  -3,529
  -4,046
  -4,600
  -5,190
  -5,815
  -6,474
  -7,167
  -7,893
  -8,652
  -9,445
  -10,270
  -11,130
  -12,023
  -12,953
  -13,918
  -14,922
  -15,965
  -17,049
Total debt, $m
  2,024
  3,227
  4,755
  6,652
  8,955
  11,698
  14,909
  18,606
  22,802
  27,505
  32,716
  38,429
  44,639
  51,336
  58,508
  66,145
  74,236
  82,771
  91,742
  101,144
  110,974
  121,233
  131,922
  143,049
  154,621
  166,651
  179,153
  192,144
  205,646
  219,680
Total liabilities, $m
  3,068
  4,271
  5,799
  7,695
  9,999
  12,742
  15,952
  19,649
  23,846
  28,549
  33,759
  39,473
  45,683
  52,380
  59,552
  67,189
  75,280
  83,814
  92,785
  102,187
  112,018
  122,276
  132,966
  144,092
  155,665
  167,694
  180,196
  193,188
  206,689
  220,723
Total equity, $m
  1,437
  2,001
  2,716
  3,605
  4,684
  5,969
  7,473
  9,204
  11,170
  13,373
  15,814
  18,490
  21,399
  24,536
  27,896
  31,473
  35,263
  39,261
  43,463
  47,868
  52,472
  57,278
  62,285
  67,497
  72,918
  78,553
  84,409
  90,495
  96,819
  103,393
Total liabilities and equity, $m
  4,505
  6,272
  8,515
  11,300
  14,683
  18,711
  23,425
  28,853
  35,016
  41,922
  49,573
  57,963
  67,082
  76,916
  87,448
  98,662
  110,543
  123,075
  136,248
  150,055
  164,490
  179,554
  195,251
  211,589
  228,583
  246,247
  264,605
  283,683
  303,508
  324,116
Debt-to-equity ratio
  1.410
  1.610
  1.750
  1.850
  1.910
  1.960
  2.000
  2.020
  2.040
  2.060
  2.070
  2.080
  2.090
  2.090
  2.100
  2.100
  2.110
  2.110
  2.110
  2.110
  2.110
  2.120
  2.120
  2.120
  2.120
  2.120
  2.120
  2.120
  2.120
  2.120
Adjusted equity ratio
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  756
  1,081
  1,492
  2,000
  2,616
  3,348
  4,202
  5,184
  6,297
  7,542
  9,039
  10,547
  12,184
  13,947
  15,834
  17,841
  19,966
  22,207
  24,561
  27,026
  29,603
  32,292
  35,093
  38,008
  41,040
  44,191
  47,466
  50,869
  54,405
  58,081
Depreciation, amort., depletion, $m
  391
  480
  592
  732
  902
  1,105
  1,341
  1,614
  1,924
  2,270
  2,490
  2,912
  3,370
  3,864
  4,393
  4,956
  5,553
  6,182
  6,844
  7,538
  8,263
  9,020
  9,808
  10,629
  11,482
  12,370
  13,292
  14,250
  15,246
  16,281
Funds from operations, $m
  1,147
  1,560
  2,084
  2,732
  3,518
  4,452
  5,544
  6,798
  8,221
  9,812
  11,529
  13,459
  15,554
  17,811
  20,227
  22,797
  25,519
  28,389
  31,405
  34,564
  37,866
  41,312
  44,901
  48,637
  52,522
  56,561
  60,758
  65,119
  69,651
  74,363
Change in working capital, $m
  -71
  -93
  -118
  -146
  -178
  -212
  -248
  -286
  -324
  -363
  -402
  -441
  -480
  -517
  -554
  -590
  -625
  -659
  -693
  -726
  -759
  -792
  -826
  -859
  -894
  -929
  -966
  -1,003
  -1,043
  -1,084
Cash from operations, $m
  1,219
  1,653
  2,202
  2,879
  3,696
  4,664
  5,792
  7,084
  8,545
  10,176
  11,932
  13,900
  16,033
  18,328
  20,781
  23,387
  26,144
  29,048
  32,098
  35,290
  38,626
  42,104
  45,727
  49,496
  53,416
  57,490
  61,723
  66,122
  70,694
  75,447
Maintenance CAPEX, $m
  -158
  -226
  -315
  -428
  -568
  -738
  -940
  -1,177
  -1,449
  -1,759
  -2,106
  -2,490
  -2,912
  -3,370
  -3,864
  -4,393
  -4,956
  -5,553
  -6,182
  -6,844
  -7,538
  -8,263
  -9,020
  -9,808
  -10,629
  -11,482
  -12,370
  -13,292
  -14,250
  -15,246
New CAPEX, $m
  -680
  -887
  -1,127
  -1,399
  -1,699
  -2,024
  -2,368
  -2,727
  -3,096
  -3,469
  -3,843
  -4,215
  -4,581
  -4,940
  -5,291
  -5,633
  -5,968
  -6,295
  -6,617
  -6,935
  -7,251
  -7,567
  -7,885
  -8,207
  -8,536
  -8,874
  -9,222
  -9,583
  -9,959
  -10,352
Cash from investing activities, $m
  -838
  -1,113
  -1,442
  -1,827
  -2,267
  -2,762
  -3,308
  -3,904
  -4,545
  -5,228
  -5,949
  -6,705
  -7,493
  -8,310
  -9,155
  -10,026
  -10,924
  -11,848
  -12,799
  -13,779
  -14,789
  -15,830
  -16,905
  -18,015
  -19,165
  -20,356
  -21,592
  -22,875
  -24,209
  -25,598
Free cash flow, $m
  380
  540
  760
  1,052
  1,429
  1,903
  2,484
  3,180
  4,000
  4,948
  5,983
  7,195
  8,541
  10,019
  11,626
  13,361
  15,220
  17,200
  19,298
  21,511
  23,837
  26,274
  28,822
  31,481
  34,251
  37,134
  40,132
  43,247
  46,485
  49,848
Issuance/(repayment) of debt, $m
  922
  1,203
  1,528
  1,896
  2,303
  2,743
  3,210
  3,697
  4,197
  4,703
  5,210
  5,714
  6,210
  6,697
  7,172
  7,637
  8,091
  8,535
  8,971
  9,402
  9,830
  10,259
  10,690
  11,126
  11,572
  12,030
  12,502
  12,992
  13,501
  14,034
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  922
  1,203
  1,528
  1,896
  2,303
  2,743
  3,210
  3,697
  4,197
  4,703
  5,210
  5,714
  6,210
  6,697
  7,172
  7,637
  8,091
  8,535
  8,971
  9,402
  9,830
  10,259
  10,690
  11,126
  11,572
  12,030
  12,502
  12,992
  13,501
  14,034
Total cash flow (excl. dividends), $m
  1,302
  1,742
  2,288
  2,948
  3,733
  4,646
  5,694
  6,877
  8,196
  9,651
  11,193
  12,909
  14,751
  16,715
  18,799
  20,998
  23,311
  25,735
  28,269
  30,913
  33,667
  36,533
  39,512
  42,608
  45,823
  49,164
  52,634
  56,239
  59,986
  63,882
Retained Cash Flow (-), $m
  -433
  -563
  -716
  -888
  -1,079
  -1,285
  -1,504
  -1,732
  -1,966
  -2,203
  -2,441
  -2,676
  -2,909
  -3,137
  -3,360
  -3,577
  -3,790
  -3,998
  -4,202
  -4,404
  -4,605
  -4,805
  -5,007
  -5,212
  -5,421
  -5,635
  -5,856
  -6,086
  -6,324
  -6,574
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  4
  6
  8
  11
  15
  19
  25
  31
  38
  46
  55
  65
  76
  88
  101
  115
  130
  145
  162
  179
  197
  216
  236
  257
  278
  301
  324
  348
  373
  399
Cash available for distribution, $m
  869
  1,179
  1,572
  2,060
  2,654
  3,361
  4,190
  5,145
  6,231
  7,448
  8,752
  10,232
  11,842
  13,579
  15,439
  17,421
  19,521
  21,737
  24,067
  26,509
  29,062
  31,727
  34,505
  37,396
  40,403
  43,529
  46,777
  50,153
  53,662
  57,308
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  833
  1,079
  1,368
  1,696
  2,057
  2,439
  2,831
  3,216
  3,579
  3,904
  4,156
  4,367
  4,503
  4,559
  4,533
  4,427
  4,247
  4,003
  3,706
  3,368
  3,006
  2,633
  2,261
  1,905
  1,572
  1,270
  1,004
  776
  586
  432
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

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.

FINANCIAL RATIOS  of  Broadridge Financial Solutions (BR)

Valuation Ratios
P/E Ratio 42.2
Price to Sales 3.3
Price to Book 13.8
Price to Tangible Book
Price to Cash Flow 26.8
Price to Free Cash Flow 44.2
Growth Rates
Sales Growth Rate 43%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 168.4%
Cap. Spend. - 3 Yr. Gr. Rate 30.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 109.8%
Total Debt to Equity 109.8%
Interest Coverage 12
Management Effectiveness
Return On Assets 11.8%
Ret/ On Assets - 3 Yr. Avg. 12.5%
Return On Total Capital 15.7%
Ret/ On T. Cap. - 3 Yr. Avg. 17%
Return On Equity 31.9%
Return On Equity - 3 Yr. Avg. 31.2%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 24.9%
Gross Margin - 3 Yr. Avg. 29.6%
EBITDA Margin 17%
EBITDA Margin - 3 Yr. Avg. 19.4%
Operating Margin 12.8%
Oper. Margin - 3 Yr. Avg. 15.8%
Pre-Tax Margin 11.8%
Pre-Tax Margin - 3 Yr. Avg. 14.8%
Net Profit Margin 7.9%
Net Profit Margin - 3 Yr. Avg. 9.7%
Effective Tax Rate 33%
Eff/ Tax Rate - 3 Yr. Avg. 34%
Payout Ratio 46.5%

BR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BR stock intrinsic value calculation we used $4143 million for the last fiscal year's total revenue generated by Broadridge Financial Solutions. The default revenue input number comes from 2017 income statement of Broadridge Financial Solutions. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BR stock valuation model: a) initial revenue growth rate of 43% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for BR is calculated based on our internal credit rating of Broadridge Financial Solutions, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Broadridge Financial Solutions.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BR stock the variable cost ratio is equal to 82.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Broadridge Financial Solutions.

Corporate tax rate of 27% is the nominal tax rate for Broadridge Financial Solutions. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BR stock is equal to 0.1%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BR are equal to 38.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Broadridge Financial Solutions operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BR is equal to -4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1004 million for Broadridge Financial Solutions - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 118 million for Broadridge Financial Solutions is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Broadridge Financial Solutions at the current share price and the inputted number of shares is $14.0 billion.

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COMPANY NEWS

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▶ How to Play Blockchain Without Getting Burned   [May-30-18 01:19PM  InvestorPlace]
▶ Broadridge to Participate at Upcoming Investor Conferences   [May-23-18 04:45PM  GlobeNewswire]
▶ Jim Cramer: Broadridge Helps the Individual Investor   [May-09-18 11:33AM  TheStreet.com]
▶ Top 3 Growth Stocks for 2018   [May-03-18 05:44PM  Investopedia]
▶ Edited Transcript of BR presentation 6-Mar-17 1:05pm GMT   [Apr-10-18 02:37PM  Thomson Reuters StreetEvents]
▶ Broadridge Financial tops Street 2Q forecasts   [08:25AM  Associated Press]
▶ Broadridge Boosts Employee Pay and Expands Benefits   [Feb-07-18 04:30PM  PR Newswire]
▶ Broadridge Declares Quarterly Dividend of $0.365 Per Share   [Feb-06-18 01:08PM  GlobeNewswire]
▶ Broadridge Financial Solutions Sees Composite Rating Move Up To 96   [Jan-16-18 03:00AM  Investor's Business Daily]
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