NYSE:RRD

Stock Analysis Report

Executive Summary

R.R. Donnelley & Sons Company, an integrated communications provider, enables organizations to create, manage, deliver, and optimize their multichannel marketing and business communications.

Rewards

Trading at 76.5% below its fair value

Earnings are forecast to grow 73.82% per year

Risk Analysis

Dividend of 3.42% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Moderate growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has R.R. Donnelley & Sons's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RRD's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-11.0%

RRD

-0.1%

US Commercial Services

-2.7%

US Market


1 Year Return

-40.7%

RRD

24.0%

US Commercial Services

21.2%

US Market

Return vs Industry: RRD underperformed the US Commercial Services industry which returned 23.7% over the past year.

Return vs Market: RRD underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

RRDIndustryMarket
7 Day-11.0%-0.1%-2.7%
30 Day-22.1%3.7%0.09%
90 Day-30.9%4.2%6.9%
1 Year-38.4%-40.7%28.5%24.0%23.8%21.2%
3 Year-79.1%-81.9%65.9%55.0%48.1%38.6%
5 Year-83.2%-93.9%109.8%88.5%72.5%53.4%

Price Volatility Vs. Market

How volatile is R.R. Donnelley & Sons's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is R.R. Donnelley & Sons undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RRD ($3.51) is trading below our estimate of fair value ($14.93)

Significantly Below Fair Value: RRD is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RRD is unprofitable, so we can't compare its PE Ratio to the Commercial Services industry average.

PE vs Market: RRD is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RRD's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RRD has negative assets, so we can't compare its PB Ratio to the US Commercial Services industry average.


Next Steps

Future Growth

How is R.R. Donnelley & Sons forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

73.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RRD is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: RRD is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: RRD's is expected to become profitable in the next 3 years.

Revenue vs Market: RRD's revenue is expected to decline over the next 3 years (-4.7% per year).

High Growth Revenue: RRD's revenue is forecast to decline over the next 3 years (-4.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RRD's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has R.R. Donnelley & Sons performed over the past 5 years?

-21.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RRD is currently unprofitable.

Growing Profit Margin: RRD is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RRD is unprofitable, and losses have increased over the past 5 years at a rate of -21.1% per year.

Accelerating Growth: Unable to compare RRD's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RRD is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (-1.3%).


Return on Equity

High ROE: RRD's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is R.R. Donnelley & Sons's financial position?


Financial Position Analysis

Short Term Liabilities: RRD has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: RRD has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: RRD has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: RRD's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: RRD has a high level of physical assets or inventory.

Debt Coverage by Assets: RRD has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable RRD has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: RRD is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -22% per year.


Next Steps

Dividend

What is R.R. Donnelley & Sons's current dividend yield, its reliability and sustainability?

3.92%

Current Dividend Yield


Upcoming Dividend Payment

Purchase R.R. Donnelley & Sons before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: RRD's dividend (3.42%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: RRD's dividend (3.8%) is in the top 25% of dividend payers in the US market (3.65%)


Stability and Growth of Payments

Stable Dividend: RRD's dividend payments have been volatile in the past 10 years.

Growing Dividend: RRD's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: RRD is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of R.R. Donnelley & Sons's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Daniel Knotts (55yo)

3.3yrs

Tenure

US$5,822,882

Compensation

Mr. Daniel Lee Knotts, also known as Dan, has been the Chief Executive Officer and President of R.R. Donnelley & Sons Company since October 1, 2016. Mr. Knotts brings over 30 years of experience in the pri ...


CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD5.82M) is above average for companies of similar size in the US market ($USD1.08M).

Compensation vs Earnings: Daniel's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.9yrs

Average Tenure

54yo

Average Age

Experienced Management: RRD's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

60yo

Average Age

Experienced Board: RRD's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$225,07030 Aug 19
Chatham Asset Management
EntityCompany
Shares100,000
Max PriceUS$2.25
BuyUS$1,120,72228 Aug 19
Chatham Asset Management
EntityCompany
Shares508,000
Max PriceUS$2.25
BuyUS$1,432,87026 Aug 19
Chatham Asset Management
EntityCompany
Shares650,000
Max PriceUS$2.24
BuyUS$1,571,99822 Aug 19
Chatham Asset Management
EntityCompany
Shares776,000
Max PriceUS$2.07

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Mike Sharp (57yo)

    Senior VP

    • Tenure: 2.2yrs
  • Terry Peterson (54yo)

    Executive VP & CFO

    • Tenure: 3.3yrs
    • Compensation: US$1.86m
  • Ken O'Brien (58yo)

    Executive VP & Chief Information Officer

    • Tenure: 15.8yrs
    • Compensation: US$1.16m
  • Daniel Knotts (55yo)

    President

    • Tenure: 3.3yrs
    • Compensation: US$5.82m
  • Sheila Rutt (50yo)

    Executive VP & Chief Human Resources Officer

    • Tenure: 2.5yrs
  • David Gardella (49yo)

    Senior Vice President of Finance

    • Doug Ryan (56yo)

      President of RRD Marketing Solutions

      • Tenure: 1.8yrs
      • Compensation: US$1.61m
    • Deb Steiner (51yo)

      Executive VP

      • Tenure: 3.3yrs
      • Compensation: US$1.24m
    • John Pecaric (53yo)

      President of RRD Business Services

      • Tenure: 1.8yrs
      • Compensation: US$1.44m
    • Brian Feeney

      Senior Vice President of Investor Relations


      Board Members

      • Tim McLevish (64yo)

        Independent Director

        • Tenure: 3.3yrs
        • Compensation: US$276.08k
      • Jack Pope (70yo)

        Independent Chairman of the Board

        • Tenure: 5.7yrs
        • Compensation: US$449.02k
      • Jamie Moldafsky (58yo)

        Independent Director

        • Tenure: 3.3yrs
        • Compensation: US$251.08k
      • Irene Esteves (60yo)

        Independent Director

        • Tenure: 2.2yrs
        • Compensation: US$249.43k
      • Paul Phipps (57yo)

        Independent Director

        • Tenure: 3.3yrs
        • Compensation: US$276.08k
      • Susan Gianinno (70yo)

        Independent Director

        • Tenure: 6.5yrs
        • Compensation: US$272.46k
      • Daniel Knotts (55yo)

        President

        • Tenure: 3.3yrs
        • Compensation: US$5.82m

      Company Information

      R.R. Donnelley & Sons Company's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: R.R. Donnelley & Sons Company
      • Ticker: RRD
      • Exchange: NYSE
      • Founded: 1864
      • Industry: Commercial Printing
      • Sector: Commercial Services
      • Market Cap: US$216.954m
      • Shares outstanding: 70.90m
      • Website: https://www.rrdonnelley.com

      Number of Employees


      Location

      • R.R. Donnelley & Sons Company
      • 35 West Wacker Drive
      • Chicago
      • Illinois
      • 60601
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      DLLNDB (Deutsche Boerse AG)COMDEUSDNo data
      RRDNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
      DLLNDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968

      Biography

      R.R. Donnelley & Sons Company, an integrated communications provider, enables organizations to create, manage, deliver, and optimize their multichannel marketing and business communications. It operates through Business Services and Marketing Solutions segments. The Business Services segment offers commercial printing products and branded materials, including manuals, publications, brochures, business cards, flyers, post cards, posters, and promotional items; and specialized transportation and distribution services. It also provides customer billings, financial statements, healthcare communications, and insurance document statement printing services; distribution, shipping, healthcare, durable goods, promotional, and consumer product goods packaging labels; and packaging solutions, including rigid boxes and in-box print materials for clients in the consumer electronics, life sciences, cosmetics, and consumer packaged goods industries. In addition, this segment offers workflow design, assembly, configuration, kitting, and fulfillment services for clients in the consumer electronics, telecommunications, life sciences, cosmetics, education, and industrial industries. Further, it provides invoices, order, and business forms that support the private and public sectors; and outsourcing services, such as creative services, research and analytics, financial management, and other services for legal providers, insurance, telecommunications, utilities, retail, and financial services companies. The Marketing Solutions segment offers direct marketing, such as audience segmentation, creative development, program testing, print production, postal optimization, and performance analytics for large-scale personalized direct mail programs; and in-store marketing, digital print, kitting, fulfillment, digital, and creative solutions and list services. It operates in the United States, Asia, Europe, and internationally. The company was founded in 1864 and is based in Chicago, Illinois. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 23:35
      End of Day Share Price2020/01/27 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.