Contrasting Zhihu (NYSE:ZH) & Broadridge Financial Solutions (NYSE:BR)

Broadridge Financial Solutions (NYSE:BR) and Zhihu (NYSE:ZH) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Profitability

This table compares Broadridge Financial Solutions and Zhihu’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%
Zhihu	-9.28%	-8.01%	-5.65%

Volatility & Risk

Broadridge Financial Solutions has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Zhihu has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.

Insider and Institutional Ownership

90.0% of Broadridge Financial Solutions shares are held by institutional investors. Comparatively, 28.9% of Zhihu shares are held by institutional investors. 1.3% of Broadridge Financial Solutions shares are held by insiders. Comparatively, 13.6% of Zhihu shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadridge Financial Solutions	$6.68 billion	4.24	$698.10 million	$6.39	37.92
Zhihu	$3.88 billion	0.12	-$118.82 million	($0.56)	-9.42

Broadridge Financial Solutions has higher revenue and earnings than Zhihu. Zhihu 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.

Analyst Ratings

This is a summary of recent ratings and target prices for Broadridge Financial Solutions and Zhihu, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadridge Financial Solutions	0	5	2	0	2.29
Zhihu	0	0	1	0	3.00

Broadridge Financial Solutions presently has a consensus price target of $239.17, indicating a potential downside of 1.29%. Zhihu has a consensus price target of $4.70, indicating a potential downside of 10.90%. Given Broadridge Financial Solutions’ higher possible upside, research analysts clearly believe Broadridge Financial Solutions is more favorable than Zhihu.

Summary

Broadridge Financial Solutions beats Zhihu on 12 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 Zhihu

Zhihu Inc. operates an online content community in the People’s Republic of China. Its community allows people to seek inspiration, find solutions, make decisions, and have fun. The company offers technology, business support, and consulting services; information transmission, software, and information technology services. It also offers information and marketing services; vocational training; and internet services, as well as holds audio-visual permit. Zhihu Inc. was founded in 2010 and is headquartered in Beijing, the People’s Republic of China.