Comparing Donnelley Financial Solutions (NYSE:DFIN) and Piper Sandler Companies (NYSE:PIPR)

Piper Sandler Companies (NYSE:PIPR) and Donnelley Financial Solutions (NYSE:DFIN) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Earnings and Valuation

This table compares Piper Sandler Companies and Donnelley Financial Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Piper Sandler Companies	$1.90 billion	2.41	$281.33 million	$4.32	15.03
Donnelley Financial Solutions	$767.00 million	1.74	$32.40 million	$1.45	37.52

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

Profitability

This table compares Piper Sandler Companies and Donnelley Financial Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Piper Sandler Companies	14.51%	21.92%	14.60%
Donnelley Financial Solutions	4.53%	25.82%	12.29%

Insider and Institutional Ownership

72.8% of Piper Sandler Companies shares are owned by institutional investors. Comparatively, 93.8% of Donnelley Financial Solutions shares are owned by institutional investors. 3.1% of Piper Sandler Companies shares are owned by company insiders. Comparatively, 5.2% of Donnelley Financial Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Piper Sandler Companies has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Donnelley Financial Solutions has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Piper Sandler Companies and Donnelley Financial Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Piper Sandler Companies	2	1	3	0	2.17
Donnelley Financial Solutions	0	2	2	1	2.80

Piper Sandler Companies presently has a consensus target price of $90.81, suggesting a potential upside of 39.86%. Donnelley Financial Solutions has a consensus target price of $61.00, suggesting a potential upside of 12.12%. Given Piper Sandler Companies’ higher possible upside, equities research analysts clearly believe Piper Sandler Companies is more favorable than Donnelley Financial Solutions.

Summary

Piper Sandler Companies beats Donnelley Financial Solutions on 9 of the 15 factors compared between the two stocks.

About Piper Sandler Companies

Piper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. The company offers investment banking and institutional sales, trading, and research services for various equity and fixed income products. It provides advisory services, such as mergers and acquisitions, equity private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and offers municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. The company also offers public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, and transportation sectors. In addition, it provides equity and fixed income advisory and trade execution services for institutional investors, and government and non-profit entities. Further, the company is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors, as well as trading activities. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.

About Donnelley Financial Solutions

Donnelley Financial Solutions, Inc. provides innovative software and technology-enabled financial regulatory and compliance solutions in the United States, Asia, Europe, Canada, and internationally. It operates through four segments: Capital Markets Software Solutions (CM-SS); Capital Markets Compliance and Communications Management (CM-CCM); Investment Companies Software Solutions (IC-SS); and Investment Companies Compliance and Communications Management (IC-CCM). The CM-SS segment provides Venue and ActiveDisclosure solutions to public and private companies to manage public and private transactional and compliance processes; collaborate; and tag, validate, and file SEC documents. The CM-CCM segment offers tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro, and ArcRegulatory, as well as services that enable storage and management of compliance and regulatory information in a self-service and central repository for accessing, assembling, editing, translating, rendering, and submitting documents to regulators and investors. The IC-CCM segment offers tech-enabled solutions for creating, filing and distributing regulatory communications, and solutions for investor communications, as well as XBRL and iXBRL-formatted filings pursuant for Investment Company Act through the SEC’s EDGAR system. This segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review, and expert support. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.