Brady (NYSE: BRC) and Quad/Graphics (NYSE:QUAD) are both small-cap industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.2%. Quad/Graphics pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. Brady pays out 56.1% of its earnings in the form of a dividend. Quad/Graphics pays out 58.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Brady has raised its dividend for 32 consecutive years.
Institutional & Insider Ownership
79.2% of Brady shares are held by institutional investors. Comparatively, 50.8% of Quad/Graphics shares are held by institutional investors. 15.6% of Brady shares are held by company insiders. Comparatively, 9.3% of Quad/Graphics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Brady and Quad/Graphics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations and price targets for Brady and Quad/Graphics, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Brady presently has a consensus target price of $39.00, suggesting a potential upside of 1.43%. Given Brady’s higher possible upside, equities research analysts clearly believe Brady is more favorable than Quad/Graphics.
Volatility & Risk
Brady has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Quad/Graphics has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Valuation and Earnings
This table compares Brady and Quad/Graphics’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brady||$1.11 billion||1.79||$95.64 million||$1.48||25.98|
|Quad/Graphics||$4.13 billion||0.35||$107.20 million||$2.06||13.14|
Quad/Graphics has higher revenue and earnings than Brady. Quad/Graphics is trading at a lower price-to-earnings ratio than Brady, indicating that it is currently the more affordable of the two stocks.
Brady beats Quad/Graphics on 9 of the 16 factors compared between the two stocks.
Brady Company Profile
Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.
Quad/Graphics Company Profile
Quad/Graphics, Inc. is a marketing services provider. The Company’s segments are United States Print and Related Services, International and Corporate. The United States Print and Related Services segment consists of the Company’s United States printing operations. The United States Print and Related Services segment includes retail inserts, publications, catalogs, special interest publications, journals, direct mail, books, directories, in-store marketing and promotion, packaging, newspapers, custom print products, other commercial and specialty printed products, and global paper procurement. The United States Print and Related Services segment also includes marketing and other complementary services, including marketing strategy and data insights. The International segment consists of the Company’s printing operations in Europe and Latin America, including operations in England, France, Germany and Poland, as well as investments in printing operations in Brazil and India.
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