Financial Analysis: Donnelley Financial Solutions (DFIN) versus Its Competitors

Donnelley Financial Solutions (NYSE:DFIN) is one of 433 public companies in the “Software – Application” industry, but how does it compare to its rivals? We will compare Donnelley Financial Solutions to similar companies based on the strength of its risk, valuation, earnings, profitability, dividends, institutional ownership and analyst recommendations.

Profitability

This table compares Donnelley Financial Solutions and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Donnelley Financial Solutions	13.22%	25.45%	12.27%
Donnelley Financial Solutions Competitors	-26.01%	-87.77%	-7.11%

Earnings & Valuation

This table compares Donnelley Financial Solutions and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Donnelley Financial Solutions	$802.60 million	$82.20 million	19.50
Donnelley Financial Solutions Competitors	$278.62 million	$21.61 million	507.19

Donnelley Financial Solutions has higher revenue and earnings than its rivals. Donnelley Financial Solutions is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Volatility & Risk

Donnelley Financial Solutions has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Donnelley Financial Solutions’ rivals have a beta of 1.04, suggesting that their average share price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Donnelley Financial Solutions and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donnelley Financial Solutions	0	0	3	0	3.00
Donnelley Financial Solutions Competitors	507	1751	3633	67	2.55

Donnelley Financial Solutions currently has a consensus price target of $77.00, indicating a potential upside of 20.39%. As a group, “Software – Application” companies have a potential upside of 25.64%. Given Donnelley Financial Solutions’ rivals higher probable upside, analysts clearly believe Donnelley Financial Solutions has less favorable growth aspects than its rivals.

Insider & Institutional Ownership

93.8% of Donnelley Financial Solutions shares are held by institutional investors. Comparatively, 32.0% of shares of all “Software – Application” companies are held by institutional investors. 11.9% of Donnelley Financial Solutions shares are held by company insiders. Comparatively, 31.7% of shares of all “Software – Application” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Donnelley Financial Solutions beats its rivals on 9 of the 13 factors compared.

Donnelley Financial Solutions Company Profile

Donnelley Financial Solutions, Inc. provides innovative software and technology-enabled financial regulatory and compliance solutions in the United States, Asia, Europe, Canada, and internationally. It operates through four segments: Capital Markets Software Solutions (CM-SS); Capital Markets Compliance and Communications Management (CM-CCM); Investment Companies Software Solutions (IC-SS); and Investment Companies Compliance and Communications Management (IC-CCM). The CM-SS segment provides Venue and ActiveDisclosure solutions to public and private companies to manage public and private transactional and compliance processes; collaborate; and tag, validate, and file SEC documents. The CM-CCM segment offers tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro, and ArcRegulatory, as well as services that enable storage and management of compliance and regulatory information in a self-service and central repository for accessing, assembling, editing, translating, rendering, and submitting documents to regulators and investors. The IC-CCM segment offers tech-enabled solutions for creating, filing and distributing regulatory communications, and solutions for investor communications, as well as XBRL and iXBRL-formatted filings pursuant for Investment Company Act through the SEC’s EDGAR system. This segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review, and expert support. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.