Head-To-Head Survey: Liquidity Services (NASDAQ:LQDT) and Quad Graphics (NYSE:QUAD)

Quad Graphics (NYSE:QUAD) and Liquidity Services (NASDAQ:LQDT) are both small-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Valuation & Earnings

This table compares Quad Graphics and Liquidity Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quad Graphics	$2.42 billion	0.23	$27.00 million	$0.63	16.97
Liquidity Services	$476.67 million	2.77	$28.09 million	$1.02	41.27

Liquidity Services has lower revenue, but higher earnings than Quad Graphics. Quad Graphics is trading at a lower price-to-earnings ratio than Liquidity Services, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Quad Graphics has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Liquidity Services has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares Quad Graphics and Liquidity Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quad Graphics	1.31%	47.90%	4.61%
Liquidity Services	6.79%	17.60%	9.86%

Analyst Ratings

This is a summary of recent ratings and target prices for Quad Graphics and Liquidity Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quad Graphics	0	1	3	1	3.00
Liquidity Services	0	0	2	1	3.33

Quad Graphics currently has a consensus target price of $12.00, indicating a potential upside of 12.25%. Liquidity Services has a consensus target price of $50.00, indicating a potential upside of 18.76%. Given Liquidity Services’ stronger consensus rating and higher possible upside, analysts clearly believe Liquidity Services is more favorable than Quad Graphics.

Institutional & Insider Ownership

39.5% of Quad Graphics shares are held by institutional investors. Comparatively, 71.2% of Liquidity Services shares are held by institutional investors. 14.2% of Quad Graphics shares are held by insiders. Comparatively, 28.1% of Liquidity Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Liquidity Services beats Quad Graphics on 10 of the 14 factors compared between the two stocks.

About Quad Graphics

Quad/Graphics, Inc. provides marketing solutions worldwide. The company operates through United States Print and Related Services, and International segments. It offers printing services, such as retail inserts, publications, catalogs, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, and other commercial and specialty printed products; and paper procurement services. The company also provides marketing and other services, including data and analytics, technology solutions, media services, creative and content solutions, managed services, and execution in non-print channels, as well as manufactures ink. It serves blue-chip companies that operate in various industries, and serve businesses and consumers across various industry verticals comprising retail, consumer packaged goods and direct-to-consumer, as well as financial services and health. The company was founded in 1971 and is headquartered in Sussex, Wisconsin.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.