Quad/Graphics (NYSE: QUAD) and R.R. Donnelley & Sons (NYSE:RRD) are both small-cap industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.
Institutional and Insider Ownership
49.7% of Quad/Graphics shares are owned by institutional investors. Comparatively, 85.6% of R.R. Donnelley & Sons shares are owned by institutional investors. 12.1% of Quad/Graphics shares are owned by company insiders. Comparatively, 2.3% of R.R. Donnelley & Sons shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Quad/Graphics pays an annual dividend of $1.20 per share and has a dividend yield of 5.4%. R.R. Donnelley & Sons pays an annual dividend of $0.56 per share and has a dividend yield of 6.0%. Quad/Graphics pays out 69.4% of its earnings in the form of a dividend. R.R. Donnelley & Sons pays out -7.9% 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. R.R. Donnelley & Sons is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Quad/Graphics has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, R.R. Donnelley & Sons has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.
This table compares Quad/Graphics and R.R. Donnelley & Sons’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|R.R. Donnelley & Sons||-7.15%||-42.52%||1.57%|
Valuation and Earnings
This table compares Quad/Graphics and R.R. Donnelley & Sons’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Quad/Graphics||$4.33 billion||0.27||$44.90 million||$1.73||12.83|
|R.R. Donnelley & Sons||$6.90 billion||0.09||-$495.90 million||($7.07)||-1.31|
Quad/Graphics has higher earnings, but lower revenue than R.R. Donnelley & Sons. R.R. Donnelley & Sons is trading at a lower price-to-earnings ratio than Quad/Graphics, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Quad/Graphics and R.R. Donnelley & Sons, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|R.R. Donnelley & Sons||0||0||0||0||N/A|
Quad/Graphics beats R.R. Donnelley & Sons on 9 of the 14 factors compared between the two stocks.
Quad/Graphics Company Profile
Quad/Graphics, Inc. is a marketing services provider. The Company’s segments are United States Print and Related Services, International and Corporate. The United States Print and Related Services segment consists of the Company’s United States printing operations. The United States Print and Related Services segment includes retail inserts, publications, catalogs, special interest publications, journals, direct mail, books, directories, in-store marketing and promotion, packaging, newspapers, custom print products, other commercial and specialty printed products, and global paper procurement. The United States Print and Related Services segment also includes marketing and other complementary services, including marketing strategy and data insights. The International segment consists of the Company’s printing operations in Europe and Latin America, including operations in England, France, Germany and Poland, as well as investments in printing operations in Brazil and India.
R.R. Donnelley & Sons Company Profile
R.R. Donnelley & Sons Company helps organizations communicate by working to create, manage, produce, distribute and process content on behalf of its customers. The Company’s segments include Variable Print, Strategic Services, International and Corporate. The Variable Print segment includes the Company’s United States short-run and transactional printing operations. The Variable Print segment’s primary product offerings include commercial and digital print, direct mail, labels, statement printing, forms and packaging. The Strategic Services segment includes the Company’s logistics services, print management offerings and digital and creative solutions. The International segment includes the Company’s non-United States printing operations in Asia, Latin America and Canada. The International segment’s primary product and service offerings include magazines, catalogs, retail inserts, books, directories, direct mail, logistics services and digital and creative solutions.
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