Critical Review: Star Equity (NASDAQ:STRR) vs. Broadridge Financial Solutions (NYSE:BR)

Broadridge Financial Solutions (NYSE:BR) and Star Equity (NASDAQ:STRR) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Broadridge Financial Solutions	15.04%	40.25%	12.97%
Star Equity	-4.35%	-4.21%	-2.39%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Broadridge Financial Solutions and Star Equity, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadridge Financial Solutions	0	4	4	0	2.50
Star Equity	1	1	1	1	2.50

Broadridge Financial Solutions currently has a consensus price target of $216.00, suggesting a potential upside of 28.85%. Star Equity has a consensus price target of $28.00, suggesting a potential upside of 182.34%. Given Star Equity’s higher probable upside, analysts clearly believe Star Equity is more favorable than Broadridge Financial Solutions.

Earnings and Valuation

This table compares Broadridge Financial Solutions and Star Equity”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadridge Financial Solutions	$7.48 billion	2.56	$1.12 billion	$9.62	17.43
Star Equity	$209.75 million	0.17	-$5.92 million	($3.06)	-3.24

Broadridge Financial Solutions has higher revenue and earnings than Star Equity. Star Equity 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, 3.8% of Star Equity shares are owned by institutional investors. 1.1% of Broadridge Financial Solutions shares are owned by insiders. Comparatively, 31.6% of Star Equity shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Broadridge Financial Solutions has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Star Equity has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Summary

Broadridge Financial Solutions beats Star Equity on 11 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. 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 Star Equity

Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.