Critical Survey: GFL Environmental (NYSE:GFL) versus Deluxe (NYSE:DLX)

Deluxe (NYSE:DLX) and GFL Environmental (NYSE:GFL) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Valuation and Earnings

This table compares Deluxe and GFL Environmental”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deluxe	$2.13 billion	0.49	$82.10 million	$2.25	10.07
GFL Environmental	$6.97 billion	2.17	$2.74 billion	($0.53)	-79.23

GFL Environmental has higher revenue and earnings than Deluxe. GFL Environmental is trading at a lower price-to-earnings ratio than Deluxe, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Deluxe has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, GFL Environmental has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Dividends

Deluxe pays an annual dividend of $1.20 per share and has a dividend yield of 5.3%. GFL Environmental pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. Deluxe pays out 53.3% of its earnings in the form of a dividend. GFL Environmental pays out -11.3% 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. GFL Environmental has increased its dividend for 5 consecutive years.

Profitability

This table compares Deluxe and GFL Environmental’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deluxe	4.91%	23.51%	6.12%
GFL Environmental	-3.28%	4.14%	1.55%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Deluxe and GFL Environmental, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deluxe	0	3	0	1	2.50
GFL Environmental	2	2	10	0	2.57

Deluxe presently has a consensus target price of $31.00, suggesting a potential upside of 36.84%. GFL Environmental has a consensus target price of $57.60, suggesting a potential upside of 37.17%. Given GFL Environmental’s stronger consensus rating and higher possible upside, analysts clearly believe GFL Environmental is more favorable than Deluxe.

Insider & Institutional Ownership

93.9% of Deluxe shares are owned by institutional investors. Comparatively, 64.7% of GFL Environmental shares are owned by institutional investors. 5.4% of Deluxe shares are owned by company insiders. Comparatively, 8.7% of GFL Environmental shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

About Deluxe

Deluxe Corporation provides technology-enabled solutions to enterprises, small businesses, and financial institutions in the United States, Canada, and Australia. It operates through Merchant Services, B2B Payments, Data Solutions, and Print segments. The Merchant Services offers credit and debit card authorization and payment systems, as well as processing services primarily to small and medium-sized retail and service businesses. The B2B Payments segment provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, automated receivables management, payment processing, and cash application, as well as automated payables management, such as medical payment and deluxe payment exchange. The Data solutions segment offers data-driven marketing solutions, financial institution profitability reporting, and business incorporation services. The Print segment provides printed personal and business checks, printed business forms, business accessories, and promotional products. It sells through multi-channel sales and marketing, and scalable partnerships. The company was formerly known as Deluxe Check Printers, Incorporated and changed its name to Deluxe Corporation in 1988. Deluxe Corporation was founded in 1915 and is headquartered in Minneapolis, Minnesota.

About GFL Environmental

GFL Environmental Inc. offers non-hazardous solid waste management and environmental services in Canada and the United States. It offers solid waste management, liquid waste management, and soil remediation services, including collection, transportation, transfer, recycling, and disposal services for municipal, residential, and commercial, and industrial customers. The company was incorporated in 2007 and is headquartered in Vaughan, Canada.