Head-To-Head Analysis: Broadridge Financial Solutions (NYSE:BR) vs. MercadoLibre (NASDAQ:MELI)

MercadoLibre (NASDAQ:MELI) and Broadridge Financial Solutions (NYSE:BR) are both large-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for MercadoLibre and Broadridge Financial Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MercadoLibre	0	2	14	1	2.94
Broadridge Financial Solutions	0	5	3	0	2.38

MercadoLibre currently has a consensus price target of $2,267.67, indicating a potential upside of 24.33%. Broadridge Financial Solutions has a consensus price target of $226.71, indicating a potential downside of 2.92%. Given MercadoLibre’s stronger consensus rating and higher probable upside, research analysts clearly believe MercadoLibre is more favorable than Broadridge Financial Solutions.

Volatility and Risk

MercadoLibre has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500. Comparatively, Broadridge Financial Solutions has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MercadoLibre	7.57%	40.71%	7.24%
Broadridge Financial Solutions	10.57%	41.79%	11.21%

Institutional and Insider Ownership

87.6% of MercadoLibre shares are owned by institutional investors. Comparatively, 90.0% of Broadridge Financial Solutions shares are owned by institutional investors. 0.1% of MercadoLibre shares are owned by company insiders. Comparatively, 1.3% of Broadridge Financial Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

MercadoLibre pays an annual dividend of $0.60 per share and has a dividend yield of 0.0%. Broadridge Financial Solutions pays an annual dividend of $3.52 per share and has a dividend yield of 1.5%. MercadoLibre pays out 2.1% of its earnings in the form of a dividend. Broadridge Financial Solutions pays out 60.9% 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.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MercadoLibre	$18.49 billion	5.00	$987.00 million	$28.34	64.36
Broadridge Financial Solutions	$6.51 billion	4.20	$698.10 million	$5.78	40.40

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

Summary

MercadoLibre beats Broadridge Financial Solutions on 11 of the 18 factors compared between the two stocks.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.

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.