LSC Communications (NASDAQ: LKSD) and Quad Graphics (NYSE:QUAD) are both small-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitabiliy, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

Quad Graphics pays an annual dividend of $1.20 per share and has a dividend yield of 6.3%. LSC Communications does not pay a dividend. Quad Graphics pays out 76.4% 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 LSC Communications and Quad Graphics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LSC Communications 0.59% 7.63% 1.07%
Quad Graphics 1.92% 22.79% 3.97%

Analyst Ratings

This is a summary of current recommendations for LSC Communications and Quad Graphics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LSC Communications 0 4 1 0 2.20
Quad Graphics 0 0 1 0 3.00

LSC Communications currently has a consensus target price of $24.00, indicating a potential upside of 44.93%. Given LSC Communications’ higher possible upside, analysts plainly believe LSC Communications is more favorable than Quad Graphics.

Institutional & Insider Ownership

52.2% of Quad Graphics shares are owned by institutional investors. 9.3% of Quad Graphics shares are owned by 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.

Valuation and Earnings

This table compares LSC Communications and Quad Graphics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LSC Communications $3.60 billion 0.16 $324.00 million N/A N/A
Quad Graphics $4.22 billion 0.17 $479.80 million $1.57 12.15

Quad Graphics has higher revenue and earnings than LSC Communications.

Summary

Quad Graphics beats LSC Communications on 11 of the 13 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.

Quad Graphics Company Profile

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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