R.R.Donnelley & Sons Co

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RRD : NASDAQ : Services
$17.93 | %
Today's Range: 17.81 - 17.97
Avg. Daily Volume: 1,921,800
07/22/16 - 4:00 PM ET

Financial Analysis


DONNELLEY (R R) & SONS CO's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. DONNELLEY (R R) & SONS CO has weak liquidity. Currently, the Quick Ratio is 0.91 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 25.95% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)2651.42746.1
EBITDA ($mil)250.2259.3
EBIT ($mil)143.2145.9
Net Income ($mil)39.822.3


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)263.7268.7
Total Assets ($mil)7086.17205.3
Total Debt ($mil)3577.33634.3
Equity ($mil)683.8542.9


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin21.4721.11
EBITDA Margin9.439.44
Operating Margin5.45.31
Sales Turnover1.581.62
Return on Assets2.372.34
Return on Equity24.6531.07
Debt Q1 FY16 Q1 FY15
Current Ratio1.211.5
Debt/Capital0.840.87
Interest Expense69.570.7
Interest Coverage2.062.06


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)209.4200.6
Div / share0.260.26
EPS0.190.11
Book value / share3.272.71
Institutional Own % n/a n/a
Avg Daily Volume1842427.01591735.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 32.34 for the Commercial Services & Supplies industry and a discount compared to the S&P 500 average of 25.03. Conducting a second comparison, its price-to-book ratio of 5.70 indicates a significant premium versus the S&P 500 average of 2.80 and a premium versus the industry average of 5.02. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, DONNELLEY (R R) & SONS CO seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
RRD 22.99 Peers 32.34   RRD 6.37 Peers 16.17

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

RRD is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

RRD is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
RRD 11.15 Peers 25.80   RRD 0.20 Peers 5.65

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

RRD is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

RRD trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
RRD 5.70 Peers 5.02   RRD -3.58 Peers -25.44

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

RRD is trading at a premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

RRD is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
RRD 0.35 Peers 2.23   RRD -4.40 Peers 2.64

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

RRD is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

RRD significantly trails its peers on the basis of sales growth

 

 

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