ARC Document Solutions (NYSE: ARC) and Deluxe Corporation (NYSE:DLX) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Risk & Volatility

ARC Document Solutions has a beta of 2.52, suggesting that its share price is 152% more volatile than the S&P 500. Comparatively, Deluxe Corporation has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Valuation and Earnings

This table compares ARC Document Solutions and Deluxe Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ARC Document Solutions $400.01 million 0.46 $56.98 million $0.24 16.46
Deluxe Corporation $1.91 billion 1.75 $453.00 million $4.68 14.80

Deluxe Corporation has higher revenue and earnings than ARC Document Solutions. Deluxe Corporation is trading at a lower price-to-earnings ratio than ARC Document Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

70.7% of ARC Document Solutions shares are owned by institutional investors. Comparatively, 91.4% of Deluxe Corporation shares are owned by institutional investors. 14.9% of ARC Document Solutions shares are owned by insiders. Comparatively, 2.4% of Deluxe Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Deluxe Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. ARC Document Solutions does not pay a dividend. Deluxe Corporation pays out 25.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ARC Document Solutions and Deluxe Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARC Document Solutions 0 0 1 1 3.50
Deluxe Corporation 0 0 0 0 N/A

ARC Document Solutions presently has a consensus price target of $5.25, indicating a potential upside of 32.91%. Given ARC Document Solutions’ higher probable upside, research analysts plainly believe ARC Document Solutions is more favorable than Deluxe Corporation.

Profitability

This table compares ARC Document Solutions and Deluxe Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARC Document Solutions 2.72% 7.00% 2.91%
Deluxe Corporation 11.98% 27.83% 11.83%

Summary

Deluxe Corporation beats ARC Document Solutions on 9 of the 16 factors compared between the two stocks.

ARC Document Solutions Company Profile

ARC Document Solutions, Inc. (ARC) is a document solutions provider for the architectural, engineering and construction (AEC) industry. The Company also provides document solutions to businesses of various types. ARC’s offerings include managed print services (MPS), offsite services, archive and information management (AIM), specialized color printing, Web-based document management applications, digital shipping/managed file transfer, and equipment and supplies sales. MPS is an onsite service where it installs a complete document solution platform in its customers’ offices and project sites. Its Offsite Services offering operates over 180 offsite service centers. AIM enables its customers to store information and intellectual property in a cloud-based and searchable digital archive. The Specialized Color Printing offering is focused on color printing, finishing and assembly of graphic materials. Its Web-Based Document Management Applications develop and offer tools to its customers.

Deluxe Corporation Company Profile

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).

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