Essendant (NASDAQ: ESND) and Veritiv (NYSE:VRTV) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.
Earnings and Valuation
This table compares Essendant and Veritiv’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Essendant||$5.04 billion||0.06||-$266.98 million||N/A||N/A|
|Veritiv||$8.36 billion||0.07||-$13.30 million||($0.85)||-42.18|
Insider and Institutional Ownership
97.1% of Essendant shares are owned by institutional investors. Comparatively, 94.3% of Veritiv shares are owned by institutional investors. 1.6% of Essendant shares are owned by company insiders. Comparatively, 0.8% of Veritiv shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Essendant pays an annual dividend of $0.56 per share and has a dividend yield of 6.5%. Veritiv does not pay a dividend.
This is a breakdown of current ratings and target prices for Essendant and Veritiv, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Veritiv has a consensus price target of $34.75, suggesting a potential downside of 3.07%. Given Veritiv’s higher probable upside, analysts clearly believe Veritiv is more favorable than Essendant.
This table compares Essendant and Veritiv’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Essendant has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Veritiv has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.
Veritiv beats Essendant on 7 of the 12 factors compared between the two stocks.
Essendant Inc. operates as a distributor of workplace items in the United States and internationally. It offers janitorial and sanitation supplies, breakroom items, foodservice consumables, safety and security items, and paper and packaging supplies. The company also provides technology products, such as computer accessories, imaging supplies, and data storage products; and computer hardware, including printers and other peripherals. In addition, it offers traditional office products, including writing instruments, business machines, filing and record storage products, presentation products, shipping and mailing supplies, calendars, and general office accessories; and industrial supplies, such as hand and power tools, safety and security supplies, janitorial equipment, and oilfield and welding supplies, as well as industrial maintenance, repair, and operations items. Further, the company provides cut sheet paper products; automotive products; and desks, filing and storage solutions, and seating and systems furniture, as well as various products for education, government, healthcare, and professional services markets. It serves office and workplace dealers; facilities and maintenance distributors; technology, military, automotive aftermarket, healthcare, and other vertical suppliers; industrial resellers; national resellers; and resellers in the e-commerce channel. Essendant Inc. distributes its products through 70 distribution centers to approximately 29,000 reseller customers, as well as through online. The company was formerly known as United Stationers Inc. and changed its name to Essendant Inc. in June 2015. Essendant Inc. was founded in 1922 and is headquartered in Deerfield, Illinois.
Veritiv Corporation operates as a business-to-business distributor of packaging, facility solutions, print, and publishing products and services in the United States, Canada, and internationally. It operates through four segments: Packaging, Facility Solutions, Print, and Publishing. The Packaging segment offers standard and custom packaging solutions. The Facility Solutions segment sources and sells cleaning, break-room, and other supplies, such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities. The Print segment sells and distributes commercial printing, writing, copying, digital, wide format, and specialty paper products; and graphics consumables and equipment. It also provides customized paper conversion services of commercial printing paper for distribution to document centers and form printers. The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters, printers, and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing, retail inserts, and direct mail. This segment also provides print management, procurement, and supply chain management solutions. The company also offers logistics and supply chain management solutions. It offers its products under the Endurance, nordic+, Econosource, Comet, Starbrite Opaque Select, TUFflex, Reliable, and Spring Grove brands, as well as other brands to printers, publishers, data centers, manufacturers, higher education institutions, healthcare facilities, sporting and performance arenas, retail stores, government agencies, property managers, and building service contractors. As of March 1, 2018, the company operated 170 distribution centers. Veritiv Corporation was incorporated in 2013 and is based in Atlanta, Georgia.
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