Contrasting Deluxe Corporation (DLX) and RR Donnelley & Sons Co (RRD)

Deluxe Corporation (NYSE: DLX) and RR Donnelley & Sons Co (NASDAQ:RRD) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.

Volatility & Risk

Deluxe Corporation has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, RR Donnelley & Sons Co has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500.

Profitability

This table compares Deluxe Corporation and RR Donnelley & Sons Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deluxe Corporation 11.98% 27.83% 11.83%
RR Donnelley & Sons Co 4.66% N/A 7.95%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Deluxe Corporation and RR Donnelley & Sons Co, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deluxe Corporation 0 0 0 0 N/A
RR Donnelley & Sons Co 0 0 0 0 N/A

Earnings & Valuation

This table compares Deluxe Corporation and RR Donnelley & Sons Co’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Deluxe Corporation $1.91 billion 1.77 $453.00 million $4.68 14.97
RR Donnelley & Sons Co $6.94 billion 0.10 $372.90 million $0.53 18.79

Deluxe Corporation has higher revenue, but lower earnings than RR Donnelley & Sons Co. Deluxe Corporation is trading at a lower price-to-earnings ratio than RR Donnelley & Sons Co, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

91.3% of Deluxe Corporation shares are held by institutional investors. 2.4% of Deluxe Corporation shares are held 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.

Dividends

Deluxe Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. RR Donnelley & Sons Co pays an annual dividend of $1.04 per share and has a dividend yield of 10.4%. Deluxe Corporation pays out 25.6% of its earnings in the form of a dividend. RR Donnelley & Sons Co pays out 196.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Deluxe Corporation beats RR Donnelley & Sons Co on 9 of the 12 factors compared between the two stocks.

About Deluxe Corporation

Deluxe Corporation is a provider of payment solutions. The Company provides a suite of customer life cycle management solutions to its customers across multiple channels. The Company operates in three segments: Small Business Services segment, Financial Services segment and Direct Checks segment. The Company’s product and service offerings consist of checks, forms and accessories, and other products. The forms offered by the Company include deposit tickets and check registers. Its accessories and other products include checkbook covers and stamps. The Small Business Services segment is a provider of printed forms to small businesses. The Financial Services segment provides products and services to financial institution clients and offers a suite of financial technology (FinTech) solutions. The Direct Checks segment is a direct-to-consumer check supplier. It also offers fraud protection and security services, online and offline payroll services, and electronic checks (e-checks).

About RR Donnelley & Sons Co

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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