Deluxe Corporation (NYSE: DLX) and InnerWorkings (NASDAQ:INWK) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Dividends

Deluxe Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. InnerWorkings does not pay a dividend. Deluxe Corporation pays out 25.6% of its earnings in the form of a dividend.

Risk & Volatility

Deluxe Corporation has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, InnerWorkings has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Deluxe Corporation and InnerWorkings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deluxe Corporation 0 0 0 0 N/A
InnerWorkings 0 0 2 0 3.00

InnerWorkings has a consensus price target of $14.00, suggesting a potential upside of 35.66%. Given InnerWorkings’ higher probable upside, analysts plainly believe InnerWorkings is more favorable than Deluxe Corporation.

Earnings & Valuation

This table compares Deluxe Corporation and InnerWorkings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Deluxe Corporation $1.91 billion 1.72 $453.00 million $4.68 14.51
InnerWorkings $1.10 billion 0.50 $46.24 million $0.35 29.49

Deluxe Corporation has higher revenue and earnings than InnerWorkings. Deluxe Corporation is trading at a lower price-to-earnings ratio than InnerWorkings, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.4% of Deluxe Corporation shares are held by institutional investors. Comparatively, 80.0% of InnerWorkings shares are held by institutional investors. 2.4% of Deluxe Corporation shares are held by company insiders. Comparatively, 5.3% of InnerWorkings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Deluxe Corporation and InnerWorkings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deluxe Corporation 11.98% 27.83% 11.83%
InnerWorkings 1.76% 8.84% 3.91%

Summary

Deluxe Corporation beats InnerWorkings on 9 of the 15 factors compared between the two stocks.

About Deluxe Corporation

Deluxe Corporation is a provider of payment solutions. The Company provides a suite of customer life cycle management solutions to its customers across multiple channels. The Company operates in three segments: Small Business Services segment, Financial Services segment and Direct Checks segment. The Company’s product and service offerings consist of checks, forms and accessories, and other products. The forms offered by the Company include deposit tickets and check registers. Its accessories and other products include checkbook covers and stamps. The Small Business Services segment is a provider of printed forms to small businesses. The Financial Services segment provides products and services to financial institution clients and offers a suite of financial technology (FinTech) solutions. The Direct Checks segment is a direct-to-consumer check supplier. It also offers fraud protection and security services, online and offline payroll services, and electronic checks (e-checks).

About InnerWorkings

InnerWorkings, Inc. is a marketing execution company. The Company’s software applications and databases create an integrated solution that stores, analyzes and tracks the production capabilities of its supplier network, as well as detailed pricing data. The Company’s segments include North America and International. The North America segment includes operations in the United States and Canada. The International segment includes operations in Mexico, South America, Central America, Europe, the Middle East, Africa and Asia. The Company procures products for clients across a range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable and transportation. The Company’s clients are classified into over two categories, enterprise and transactional. The Company provides marketing materials to its transactional clients on an order-by-order basis.

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