Deluxe Corporation (NYSE: DLX) and LSC Communications (NASDAQ:LKSD) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, risk, valuation, dividends and analyst recommendations.

Earnings & Valuation

This table compares Deluxe Corporation and LSC Communications’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Deluxe Corporation $1.88 billion 1.82 $439.84 million $4.64 15.20
LSC Communications $3.60 billion 0.20 $324.00 million N/A N/A

Deluxe Corporation has higher revenue, but lower earnings than LSC Communications.

Profitability

This table compares Deluxe Corporation and LSC Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deluxe Corporation 12.14% 28.48% 12.09%
LSC Communications -0.12% -1.59% -0.21%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Deluxe Corporation and LSC Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deluxe Corporation 0 0 0 0 N/A
LSC Communications 0 3 1 0 2.25

LSC Communications has a consensus target price of $24.00, indicating a potential upside of 14.78%. Given LSC Communications’ higher probable upside, analysts clearly believe LSC Communications is more favorable than Deluxe Corporation.

Insider and Institutional Ownership

93.7% of Deluxe Corporation shares are held by institutional investors. 2.4% of Deluxe Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Deluxe Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. LSC Communications does not pay a dividend. Deluxe Corporation pays out 25.9% of its earnings in the form of a dividend.

Summary

Deluxe Corporation beats LSC Communications on 9 of the 13 factors compared between the two stocks.

About Deluxe Corporation

Deluxe Corporation is a provider of payment solutions. The Company provides a suite of customer life cycle management solutions to its customers across multiple channels. The Company operates in three segments: Small Business Services segment, Financial Services segment and Direct Checks segment. The Company’s product and service offerings consist of checks, forms and accessories, and other products. The forms offered by the Company include deposit tickets and check registers. Its accessories and other products include checkbook covers and stamps. The Small Business Services segment is a provider of printed forms to small businesses. The Financial Services segment provides products and services to financial institution clients and offers a suite of financial technology (FinTech) solutions. The Direct Checks segment is a direct-to-consumer check supplier. It also offers fraud protection and security services, online and offline payroll services, and electronic checks (e-checks).

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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