RR Donnelley & Sons Co (NASDAQ: RRD) and Quad Graphics (NYSE:QUAD) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitabiliy, risk, earnings, valuation and institutional ownership.
Risk & Volatility
RR Donnelley & Sons Co has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, Quad Graphics has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.
Dividends
RR Donnelley & Sons Co pays an annual dividend of $1.04 per share and has a dividend yield of 8.3%. Quad Graphics pays an annual dividend of $1.20 per share and has a dividend yield of 5.2%. 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. Quad Graphics pays out 93.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Profitability
This table compares RR Donnelley & Sons Co and Quad Graphics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RR Donnelley & Sons Co | -2.97% | N/A | -4.88% |
| Quad Graphics | 1.55% | 21.12% | 3.49% |
Earnings and Valuation
This table compares RR Donnelley & Sons Co and Quad Graphics’ top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| RR Donnelley & Sons Co | $6.93 billion | 0.13 | $418.10 million | $0.53 | 23.75 |
| Quad Graphics | $4.29 billion | 0.28 | $481.60 million | $1.28 | 18.18 |
Quad Graphics has higher revenue, but lower earnings than RR Donnelley & Sons Co. Quad Graphics 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.
Analyst Ratings
This is a summary of recent ratings for RR Donnelley & Sons Co and Quad Graphics, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RR Donnelley & Sons Co | 0 | 0 | 0 | 0 | N/A |
| Quad Graphics | 0 | 0 | 2 | 0 | 3.00 |
Institutional and Insider Ownership
52.4% of Quad Graphics shares are owned by institutional investors. 12.1% of Quad Graphics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Quad Graphics beats RR Donnelley & Sons Co on 10 of the 13 factors compared between the two stocks.
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.
About Quad Graphics
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.
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