Head-To-Head Comparison: InnerWorkings (INWK) vs. R.R. Donnelley & Sons (RRD)

InnerWorkings (NASDAQ: INWK) and R.R. Donnelley & Sons (NYSE:RRD) 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, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Valuation and Earnings

This table compares InnerWorkings and R.R. Donnelley & Sons’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
InnerWorkings $1.09 billion 0.52 $4.37 million $0.41 25.39
R.R. Donnelley & Sons $6.90 billion 0.08 -$495.90 million ($7.07) -1.07

InnerWorkings has higher revenue, but lower earnings than R.R. Donnelley & Sons. R.R. Donnelley & Sons is trading at a lower price-to-earnings ratio than InnerWorkings, indicating that it is currently the more affordable of the two stocks.

Dividends

R.R. Donnelley & Sons pays an annual dividend of $0.56 per share and has a dividend yield of 7.4%. InnerWorkings does not pay a dividend. R.R. Donnelley & Sons pays out -7.9% of its earnings in the form of a dividend.

Insider & Institutional Ownership

80.7% of InnerWorkings shares are owned by institutional investors. Comparatively, 90.8% of R.R. Donnelley & Sons shares are owned by institutional investors. 5.3% of InnerWorkings shares are owned by company insiders. Comparatively, 2.3% of R.R. Donnelley & Sons shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for InnerWorkings and R.R. Donnelley & Sons, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InnerWorkings 0 0 4 0 3.00
R.R. Donnelley & Sons 0 0 0 0 N/A

InnerWorkings presently has a consensus price target of $14.00, indicating a potential upside of 34.49%. Given InnerWorkings’ higher probable upside, equities analysts clearly believe InnerWorkings is more favorable than R.R. Donnelley & Sons.

Volatility & Risk

InnerWorkings has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, R.R. Donnelley & Sons has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.

Profitability

This table compares InnerWorkings and R.R. Donnelley & Sons’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InnerWorkings 2.04% 9.53% 4.27%
R.R. Donnelley & Sons -7.15% -42.52% 1.57%

Summary

InnerWorkings beats R.R. Donnelley & Sons on 10 of the 15 factors compared between the two stocks.

InnerWorkings Company Profile

InnerWorkings, Inc. is a marketing execution company. The Company’s software applications and databases create an integrated solution that stores, analyzes and tracks the production capabilities of its supplier network, as well as detailed pricing data. The Company’s segments include North America and International. The North America segment includes operations in the United States and Canada. The International segment includes operations in Mexico, South America, Central America, Europe, the Middle East, Africa and Asia. The Company procures products for clients across a range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable and transportation. The Company’s clients are classified into over two categories, enterprise and transactional. The Company provides marketing materials to its transactional clients on an order-by-order basis.

R.R. Donnelley & Sons 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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