R.R. Donnelley & Sons (RRD) and Multi-Color (LABL) Head-To-Head Analysis

R.R. Donnelley & Sons (NYSE: RRD) and Multi-Color (NASDAQ:LABL) are both small-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

R.R. Donnelley & Sons has a beta of 2.13, meaning that its stock price is 113% more volatile than the S&P 500. Comparatively, Multi-Color has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Insider and Institutional Ownership

85.6% of R.R. Donnelley & Sons shares are owned by institutional investors. Comparatively, 63.5% of Multi-Color shares are owned by institutional investors. 2.3% of R.R. Donnelley & Sons shares are owned by company insiders. Comparatively, 19.4% of Multi-Color shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares R.R. Donnelley & Sons and Multi-Color’s 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%
Multi-Color 6.10% 15.52% 5.55%

Dividends

R.R. Donnelley & Sons pays an annual dividend of $0.56 per share and has a dividend yield of 5.8%. Multi-Color pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. R.R. Donnelley & Sons pays out -8.3% of its earnings in the form of a dividend. Multi-Color pays out 5.9% 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.

Analyst Ratings

This is a breakdown of recent ratings for R.R. Donnelley & Sons and Multi-Color, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
R.R. Donnelley & Sons 0 0 0 0 N/A
Multi-Color 1 3 0 0 1.75

Multi-Color has a consensus target price of $78.33, indicating a potential upside of 4.86%. Given Multi-Color’s higher probable upside, analysts clearly believe Multi-Color is more favorable than R.R. Donnelley & Sons.

Valuation & Earnings

This table compares R.R. Donnelley & Sons and Multi-Color’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
R.R. Donnelley & Sons $6.90 billion 0.10 -$495.90 million ($6.72) -1.43
Multi-Color $923.29 million 1.65 $60.99 million $3.39 22.04

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

Summary

Multi-Color beats R.R. Donnelley & Sons on 9 of the 14 factors compared between the two stocks.

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.

Multi-Color Company Profile

Multi-Color Corporation (Multi-Color) is engaged in label solutions business, supporting brands, including producers of home and personal care, wine and spirit, food and beverage, healthcare and specialty consumer products. The Company serves international brand owners in North, Central and South America, Europe, Australia, New Zealand, South Africa and China and Southeast Asia with a range of label technologies in Pressure Sensitive, Glue-Applied (Cut and Stack), In-Mold, Shrink Sleeve and Heat Transfer. The Company also provides a range of print methods, including flexographic, lithographic, rotogravure, letterpress and digital, and in-house prepress services. The Company provides graphics and pre-press services for its customers at all of its manufacturing locations. These services include the conversion of customer digital files and artwork into proofs, production of print layouts and printing plates, and product mock ups and samples for market research.

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