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

Donnelley Financial Solutions (NYSE:DFIN) is one of 21 public companies in the “Miscellaneous business services” industry, but how does it contrast to its competitors? We will compare Donnelley Financial Solutions to related businesses based on the strength of its earnings, dividends, institutional ownership, profitability, risk, valuation and analyst recommendations.

Institutional & Insider Ownership

93.8% of Donnelley Financial Solutions shares are held by institutional investors. Comparatively, 58.2% of shares of all “Miscellaneous business services” companies are held by institutional investors. 11.9% of Donnelley Financial Solutions shares are held by insiders. Comparatively, 10.6% of shares of all “Miscellaneous business services” companies are held 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Donnelley Financial Solutions	12.06%	22.70%	11.33%
Donnelley Financial Solutions Competitors	9.55%	9.81%	5.15%

Earnings & Valuation

This table compares Donnelley Financial Solutions and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Donnelley Financial Solutions	$802.10 million	$82.20 million	18.92
Donnelley Financial Solutions Competitors	$15.50 billion	$2.53 billion	-29.86

Donnelley Financial Solutions’ competitors have higher revenue and earnings than Donnelley Financial Solutions. Donnelley Financial Solutions is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Donnelley Financial Solutions has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Donnelley Financial Solutions’ competitors have a beta of 3.69, suggesting that their average stock price is 269% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Donnelley Financial Solutions and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donnelley Financial Solutions	0	0	3	0	3.00
Donnelley Financial Solutions Competitors	61	285	554	17	2.57

Donnelley Financial Solutions presently has a consensus target price of $76.33, indicating a potential upside of 26.07%. As a group, “Miscellaneous business services” companies have a potential downside of 5.43%. Given Donnelley Financial Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Donnelley Financial Solutions is more favorable than its competitors.

Summary

Donnelley Financial Solutions beats its competitors 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.