LSC Communications (NASDAQ: LKSD) and RR Donnelley & Sons Co (NASDAQ:RRD) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

RR Donnelley & Sons Co pays an annual dividend of $1.04 per share and has a dividend yield of 11.3%. LSC Communications does not pay a dividend. RR Donnelley & Sons Co pays out 196.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings for LSC Communications and RR Donnelley & Sons Co, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LSC Communications 0 4 1 0 2.20
RR Donnelley & Sons Co 0 0 0 0 N/A

LSC Communications currently has a consensus target price of $24.00, indicating a potential upside of 48.98%. Given LSC Communications’ higher possible upside, analysts clearly believe LSC Communications is more favorable than RR Donnelley & Sons Co.

Profitability

This table compares LSC Communications and RR Donnelley & Sons Co’s 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%
RR Donnelley & Sons Co 4.66% N/A 7.95%

Valuation & Earnings

This table compares LSC Communications and RR Donnelley & Sons Co’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LSC Communications $3.54 billion 0.16 $312.00 million N/A N/A
RR Donnelley & Sons Co $6.94 billion 0.09 $372.90 million $0.53 17.42

RR Donnelley & Sons Co has higher revenue and earnings than LSC Communications.

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.

RR Donnelley & Sons Co Company Profile

R.R. Donnelley & Sons Company helps organizations communicate by working to create, manage, produce, distribute and process content on behalf of its customers. The Company’s segments include Variable Print, Strategic Services, International and Corporate. The Variable Print segment includes the Company’s United States short-run and transactional printing operations. The Variable Print segment’s primary product offerings include commercial and digital print, direct mail, labels, statement printing, forms and packaging. The Strategic Services segment includes the Company’s logistics services, print management offerings and digital and creative solutions. The International segment includes the Company’s non-United States printing operations in Asia, Latin America and Canada. The International segment’s primary product and service offerings include magazines, catalogs, retail inserts, books, directories, direct mail, logistics services and digital and creative solutions.

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