InnerWorkings (NASDAQ: INWK) and LSC Communications (NYSE:LKSD) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.
Insider & Institutional Ownership
80.8% of InnerWorkings shares are owned by institutional investors. Comparatively, 84.4% of LSC Communications shares are owned by institutional investors. 5.3% of InnerWorkings shares are owned by company insiders. Comparatively, 2.5% of LSC Communications shares are owned 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.
This table compares InnerWorkings and LSC Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current recommendations and price targets for InnerWorkings and LSC Communications, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
InnerWorkings presently has a consensus price target of $14.00, suggesting a potential upside of 36.59%. LSC Communications has a consensus price target of $24.00, suggesting a potential upside of 66.78%. Given LSC Communications’ higher possible upside, analysts plainly believe LSC Communications is more favorable than InnerWorkings.
Earnings & Valuation
This table compares InnerWorkings and LSC Communications’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|InnerWorkings||$1.09 billion||0.51||$4.37 million||$0.41||25.00|
|LSC Communications||$3.65 billion||0.14||$106.00 million||$0.29||49.62|
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.
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
InnerWorkings has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, LSC Communications has a beta of 5.96, meaning that its stock price is 496% more volatile than the S&P 500.
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.
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.
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