LSC Communications (NYSE: LKSD) and InnerWorkings (NASDAQ:INWK) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.
LSC Communications pays an annual dividend of $1.00 per share and has a dividend yield of 6.9%. InnerWorkings does not pay a dividend. 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.
Risk & Volatility
LSC Communications has a beta of 5.96, meaning that its share price is 496% more volatile than the S&P 500. Comparatively, InnerWorkings has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.
Earnings and Valuation
This table compares LSC Communications and InnerWorkings’ top-line revenue, earnings per share and valuation.
||Earnings Per Share
LSC Communications has higher revenue and earnings than InnerWorkings. InnerWorkings is trading at a lower price-to-earnings ratio than LSC Communications, indicating that it is currently the more affordable of the two stocks.
This table compares LSC Communications and InnerWorkings’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
This is a breakdown of recent recommendations and price targets for LSC Communications and InnerWorkings, as provided by MarketBeat.com.
||Strong Buy Ratings
LSC Communications presently has a consensus price target of $24.00, indicating a potential upside of 66.78%. InnerWorkings has a consensus price target of $14.00, indicating a potential upside of 36.59%. Given LSC Communications’ higher probable upside, equities analysts plainly believe LSC Communications is more favorable than InnerWorkings.
Institutional & Insider Ownership
84.4% of LSC Communications shares are held by institutional investors. Comparatively, 80.8% of InnerWorkings shares are held by institutional investors. 2.5% of LSC Communications shares are held by company insiders. Comparatively, 5.3% of InnerWorkings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
About LSC Communications
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.
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.
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