LSC Communications (NYSE: LKSD) and ARC Document Solutions (NYSE:ARC) are both small-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.
Valuation and Earnings
This table compares LSC Communications and ARC Document Solutions’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|LSC Communications||$3.65 billion||0.14||$106.00 million||$0.29||50.86|
|ARC Document Solutions||$406.32 million||0.29||-$47.86 million||($0.14)||-18.21|
LSC Communications has higher revenue and earnings than ARC Document Solutions. ARC Document Solutions is trading at a lower price-to-earnings ratio than LSC Communications, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
84.4% of LSC Communications shares are held by institutional investors. Comparatively, 70.5% of ARC Document Solutions shares are held by institutional investors. 2.5% of LSC Communications shares are held by company insiders. Comparatively, 14.9% of ARC Document Solutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This table compares LSC Communications and ARC Document Solutions’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ARC Document Solutions||-1.70%||5.35%||2.27%|
This is a summary of recent ratings and price targets for LSC Communications and ARC Document Solutions, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ARC Document Solutions||0||2||0||1||2.67|
LSC Communications presently has a consensus target price of $24.00, suggesting a potential upside of 62.71%. ARC Document Solutions has a consensus target price of $4.63, suggesting a potential upside of 81.37%. Given ARC Document Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe ARC Document Solutions is more favorable than LSC Communications.
LSC Communications pays an annual dividend of $1.00 per share and has a dividend yield of 6.8%. ARC Document Solutions does not pay a dividend. LSC Communications pays out 344.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
LSC Communications beats ARC Document Solutions on 9 of the 15 factors compared between the two stocks.
LSC Communications Company Profile
LSC Communications, Inc. focuses on traditional and digital print, print-related services and office products. The Company’s segments are Print and Office Products. The Company, through its Print segment, provides a range of print product offerings, which include magazines, catalogs, retail inserts, books and directories. In addition to printed products, the Company also provides a number of print-related services, such as supply chain management, mail services, e-book formatting and distribution services. Its Print segment services over 3,000 customers, including publishers of magazines, books and directories, online retailers, catalogers, mass merchandisers and contract stationers. In its Office Products segment, the Company manufactures and sells a range of branded and private label products, primarily within the core categories, including filing products; note-taking products; binder products; tax and stock forms, and envelopes.
ARC Document Solutions Company Profile
ARC Document Solutions, Inc. (ARC) is a document solutions provider for the architectural, engineering and construction (AEC) industry. The Company also provides document solutions to businesses of various types. ARC’s offerings include managed print services (MPS), offsite services, archive and information management (AIM), specialized color printing, Web-based document management applications, digital shipping/managed file transfer, and equipment and supplies sales. MPS is an onsite service where it installs a complete document solution platform in its customers’ offices and project sites. Its Offsite Services offering operates over 180 offsite service centers. AIM enables its customers to store information and intellectual property in a cloud-based and searchable digital archive. The Specialized Color Printing offering is focused on color printing, finishing and assembly of graphic materials. Its Web-Based Document Management Applications develop and offer tools to its customers.
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