R.R.Donnelley & Sons Co

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RRD : NYSE : Services
$17.12 | %
Today's Range: 17.01 - 17.37
Avg. Daily Volume: 1,759,700
08/26/16 - 4:00 PM ET

Financial Analysis


DONNELLEY (R R) & SONS CO's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. DONNELLEY (R R) & SONS CO has weak liquidity. Currently, the Quick Ratio is 0.92 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.

During the same period, stockholders' equity ("net worth") has decreased by 15.77% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)2729.72748.1
EBITDA ($mil)286.7309.2
EBIT ($mil)182.7196.4
Net Income ($mil)-14.543.5


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)290.6295.4
Total Assets ($mil)7088.27492.4
Total Debt ($mil)3619.43746.8
Equity ($mil)605.8719.3


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin22.1622.52
EBITDA Margin10.511.25
Operating Margin6.697.15
Sales Turnover1.571.54
Return on Assets1.561.96
Return on Equity18.2520.5
Debt Q2 FY16 Q2 FY15
Current Ratio1.221.44
Debt/Capital0.860.84
Interest Expense70.470.4
Interest Coverage2.62.79


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)209.5208.7
Div / share0.260.26
EPS-0.070.21
Book value / share2.893.45
Institutional Own % n/a n/a
Avg Daily Volume1809695.01715992.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 43.88 for the Commercial Services & Supplies industry and a premium compared to the S&P 500 average of 25.30. Conducting a second comparison, its price-to-book ratio of 5.92 indicates a significant premium versus the S&P 500 average of 2.83 and a premium versus the industry average of 5.12. 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 32.28 Peers 43.88   RRD 7.28 Peers 18.69

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 10.21 Peers 24.38   RRD 0.29 Peers 3.43

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 5.92 Peers 5.12   RRD -27.40 Peers -2.83

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.

 

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

However, RRD is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
RRD 0.32 Peers 2.27   RRD -3.28 Peers 3.31

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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