Donnelley Financial Solns (DFIN) versus Ascent Capital Group (ASCMA) Financial Review

Donnelley Financial Solns (NYSE: DFIN) and Ascent Capital Group (NASDAQ:ASCMA) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Insider & Institutional Ownership

89.7% of Donnelley Financial Solns shares are owned by institutional investors. Comparatively, 88.3% of Ascent Capital Group shares are owned by institutional investors. 1.6% of Donnelley Financial Solns shares are owned by insiders. Comparatively, 10.2% of Ascent Capital Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Donnelley Financial Solns and Ascent Capital Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Donnelley Financial Solns 0 3 1 0 2.25
Ascent Capital Group 0 2 1 0 2.33

Donnelley Financial Solns currently has a consensus target price of $23.33, indicating a potential upside of 37.58%. Ascent Capital Group has a consensus target price of $11.00, indicating a potential upside of 370.09%. Given Ascent Capital Group’s stronger consensus rating and higher possible upside, analysts plainly believe Ascent Capital Group is more favorable than Donnelley Financial Solns.

Volatility & Risk

Donnelley Financial Solns has a beta of 2.31, indicating that its stock price is 131% more volatile than the S&P 500. Comparatively, Ascent Capital Group has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500.

Valuation and Earnings

This table compares Donnelley Financial Solns and Ascent Capital Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Donnelley Financial Solns $1.00 billion 0.57 $9.70 million $0.96 17.67
Ascent Capital Group $553.46 million 0.05 -$107.55 million ($8.83) -0.27

Donnelley Financial Solns has higher revenue and earnings than Ascent Capital Group. Ascent Capital Group is trading at a lower price-to-earnings ratio than Donnelley Financial Solns, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Donnelley Financial Solns and Ascent Capital Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Donnelley Financial Solns 0.82% 22.48% 3.95%
Ascent Capital Group -21.89% -84.01% -5.77%

Summary

Donnelley Financial Solns beats Ascent Capital Group on 9 of the 12 factors compared between the two stocks.

Donnelley Financial Solns Company Profile

Donnelley Financial Solutions, Inc. provides financial communications, and data and analytics services for the investment and capital markets worldwide. It offers communication tools and services to allow its clients to comply with ongoing regulatory filings; and communications services to create, manage, and deliver registration statements, prospectuses, proxies, and other communications to regulators and investors. The company also provides virtual data rooms to facilitate the deal management requirements of capital markets, and mergers and acquisitions transactions; and data and analytics services that help professionals uncover intelligence from financial disclosure contained within public filings made with the Securities and Exchange Commission. In addition, it offers language solutions, including translation, editing, interpreting, proof-reading, and multilingual typesetting; and specialized content services, such as transcreation, copywriting, linguistic validation by subject matter experts, transcription, voice-over, subtitling, and localization, as well as application testing and quality assurance. The company serves global capital markets compliance and transaction needs for its corporate clients and their advisors, such as law firms and investment bankers; and investment management compliance and analytics needs for mutual fund companies, variable annuity providers, and broker/dealers. Donnelley Financial Solutions, Inc. is based in Chicago, Illinois.

Ascent Capital Group Company Profile

Ascent Capital Group, Inc., through its subsidiary, Monitronics International, Inc., provides security alarm monitoring services to residential and commercial customers in the United States, Canada, the District of Columbia, and Puerto Rico. The company provides monitoring services for alarm signals arising from burglaries, fires, medical alerts, and other events through security systems at customers' premises. It also offers home automation services, including remote activation and control of security systems, support for video monitoring, flood sensors, automated garage door and door lock capabilities, and thermostat integration; hands-free two-way interactive voice communication between its monitoring center and customers; and customer service and technical support related to home monitoring systems and home automation services. The company also provides maintenance and wholesale contract monitoring services to other security alarm companies. It markets and sells its products through a network of authorized dealers. The company was formerly known as Ascent Media Corporation and changed its name to Ascent Capital Group, Inc. in July 2011. Ascent Capital Group, Inc. was incorporated in 2008 and is based in Greenwood Village, Colorado.

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