Essendant (NASDAQ: ESND) and Acco Brands Corporation (NYSE:ACCO) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Risk & Volatility
Essendant has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Acco Brands Corporation has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.
Valuation and Earnings
This table compares Essendant and Acco Brands Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Essendant||$5.19 billion||0.09||$147.50 million||($4.08)||-3.08|
|Acco Brands Corporation||$1.72 billion||0.72||$256.30 million||$0.51||22.26|
Acco Brands Corporation has higher revenue, but lower earnings than Essendant. Essendant is trading at a lower price-to-earnings ratio than Acco Brands Corporation, indicating that it is currently the more affordable of the two stocks.
Essendant pays an annual dividend of $0.56 per share and has a dividend yield of 4.5%. Acco Brands Corporation does not pay a dividend. Essendant pays out -13.7% of its earnings in the form of a dividend.
This table compares Essendant and Acco Brands Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Acco Brands Corporation||3.25%||15.03%||4.39%|
Institutional and Insider Ownership
94.2% of Essendant shares are owned by institutional investors. Comparatively, 91.1% of Acco Brands Corporation shares are owned by institutional investors. 1.6% of Essendant shares are owned by company insiders. Comparatively, 4.5% of Acco Brands Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for Essendant and Acco Brands Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Acco Brands Corporation||0||0||1||0||3.00|
Essendant presently has a consensus target price of $16.50, suggesting a potential upside of 31.47%. Acco Brands Corporation has a consensus target price of $18.00, suggesting a potential upside of 58.59%. Given Acco Brands Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Acco Brands Corporation is more favorable than Essendant.
Acco Brands Corporation beats Essendant on 12 of the 16 factors compared between the two stocks.
Essendant Company Profile
Essendant Inc. (Essendant) is a wholesale distributor of workplace items. The Company’s product portfolio includes Janitorial, Foodservice and Breakroom Supplies (JanSan), Technology Products, Traditional Office Products, Industrial Supplies, Cut Sheet Paper Products, Automotive Products and Office Furniture. It operates principally within the United States, with additional operations in Canada and Dubai, the United Arab Emirates (UAE). As of December 31, 2016, the Company provided access to over 22,000 items in these lines: janitorial supplies (cleaners and cleaning accessories), breakroom items (food and beverage products), foodservice consumables (such as disposable cups, plates and utensils), safety and security items, and paper and packaging supplies. As of December 31, 2016, the Company provided access to approximately 11,000 items, including imaging supplies, data storage, digital cameras, computer accessories and computer hardware items, such as printers and other peripherals.
Acco Brands Corporation Company Profile
ACCO Brands Corporation is engaged in designing, marketing and manufacturing of branded business, academic and selected consumer products. The Company operates through three segments: ACCO Brands North America, ACCO Brands International and Computer Products Group. The Company’s brands include Artline, AT-A-GLANCE, Derwent, Esselte, Five Star, GBC, Hilroy, Kensington, Leitz, Marbig, Mead, NOBO, Quartet, Rapid, Rexel, Swingline, Tilibra and Wilson Jones. The Company’s ACCO Brands North America and ACCO Brands International design, market, source, manufacture and sell traditional office products, academic supplies and calendar products. ACCO Brands North America consists of the United States and Canada, and ACCO Brands International consists of the rest of the world, primarily Northern Europe, Australia, Brazil and Mexico. Its Computer Products Group designs, sources, distributes, markets and sells accessories for laptop and desktop computers and tablets.
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