LSC Communications (NYSE: LKSD) and Multi-Color (NASDAQ:LABL) are both small-cap commercial printing services – nec companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Valuation & Earnings

This table compares LSC Communications and Multi-Color’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LSC Communications $3.65 billion 0.15 $106.00 million $0.29 55.21
Multi-Color $923.29 million 1.63 $60.99 million $3.40 21.63

LSC Communications has higher revenue and earnings than Multi-Color. Multi-Color is trading at a lower price-to-earnings ratio than LSC Communications, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

84.4% of LSC Communications shares are held by institutional investors. Comparatively, 66.6% of Multi-Color shares are held by institutional investors. 2.5% of LSC Communications shares are held by company insiders. Comparatively, 19.4% of Multi-Color shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares LSC Communications and Multi-Color’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LSC Communications 0.28% 24.72% 3.35%
Multi-Color 6.10% 15.52% 5.55%

Dividends

LSC Communications pays an annual dividend of $1.00 per share and has a dividend yield of 6.2%. Multi-Color pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. LSC Communications pays out 344.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Multi-Color pays out 5.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations and price targets for LSC Communications and Multi-Color, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LSC Communications 0 4 0 0 2.00
Multi-Color 1 3 0 0 1.75

LSC Communications presently has a consensus price target of $24.00, suggesting a potential upside of 49.91%. Multi-Color has a consensus price target of $78.33, suggesting a potential upside of 6.50%. Given LSC Communications’ stronger consensus rating and higher possible upside, analysts clearly believe LSC Communications is more favorable than Multi-Color.

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.

Multi-Color Company Profile

Multi-Color Corporation (Multi-Color) is engaged in label solutions business, supporting brands, including producers of home and personal care, wine and spirit, food and beverage, healthcare and specialty consumer products. The Company serves international brand owners in North, Central and South America, Europe, Australia, New Zealand, South Africa and China and Southeast Asia with a range of label technologies in Pressure Sensitive, Glue-Applied (Cut and Stack), In-Mold, Shrink Sleeve and Heat Transfer. The Company also provides a range of print methods, including flexographic, lithographic, rotogravure, letterpress and digital, and in-house prepress services. The Company provides graphics and pre-press services for its customers at all of its manufacturing locations. These services include the conversion of customer digital files and artwork into proofs, production of print layouts and printing plates, and product mock ups and samples for market research.

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