BALFOUR BEATTY/S (OTCMKTS:BAFYY) and Donnelley Financial Solutions (NYSE:DFIN) are both small-cap construction companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk & Volatility

BALFOUR BEATTY/S has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Donnelley Financial Solutions has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Profitability

This table compares BALFOUR BEATTY/S and Donnelley Financial Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BALFOUR BEATTY/S N/A N/A N/A
Donnelley Financial Solutions 6.94% 26.93% 6.63%

Dividends

BALFOUR BEATTY/S pays an annual dividend of $0.14 per share and has a dividend yield of 2.5%. Donnelley Financial Solutions does not pay a dividend. BALFOUR BEATTY/S pays out 20.0% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares BALFOUR BEATTY/S and Donnelley Financial Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BALFOUR BEATTY/S $8.86 billion 0.22 $180.20 million $0.70 8.13
Donnelley Financial Solutions $963.00 million 0.41 $73.60 million $2.16 5.37

BALFOUR BEATTY/S has higher revenue and earnings than Donnelley Financial Solutions. Donnelley Financial Solutions is trading at a lower price-to-earnings ratio than BALFOUR BEATTY/S, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

0.1% of BALFOUR BEATTY/S shares are held by institutional investors. Comparatively, 93.0% of Donnelley Financial Solutions shares are held by institutional investors. 9.6% of Donnelley Financial Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for BALFOUR BEATTY/S and Donnelley Financial Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BALFOUR BEATTY/S 0 1 0 0 2.00
Donnelley Financial Solutions 2 0 0 0 1.00

Donnelley Financial Solutions has a consensus target price of $16.00, suggesting a potential upside of 37.93%. Given Donnelley Financial Solutions’ higher possible upside, analysts plainly believe Donnelley Financial Solutions is more favorable than BALFOUR BEATTY/S.

Summary

Donnelley Financial Solutions beats BALFOUR BEATTY/S on 10 of the 15 factors compared between the two stocks.

BALFOUR BEATTY/S Company Profile

Balfour Beatty Plc engages in the provision of infrastructure services. It offers a range of capabilities in construction, civil engineering and mechanical & electrical engineering services. It operates through following business segments: Construction Services, Support Services, Infrastructure Investments, and Corporate Activities. The Construction Services segment includes activities resulting in the physical construction of an asset. The Support Services segment supports existing assets or functions such as asset maintenance and refurbishment. The Infrastructure Investments segment involves in the acquisition, operation, and disposal of infrastructure assets such as roads, hospitals, student accommodation, military housing, offshore transmission networks, waste and biomass, and other concessions. The company was founded by George Balfour and Andrew Beatty on January 12, 1909 and is headquartered in London, the United Kingdom.

Donnelley Financial Solutions Company Profile

Donnelley Financial Solutions, Inc. operates as a risk and compliance solutions company in the United States, Europe, Asia, Canada, and Latin America. The Company provides regulatory filing and deal solutions through its software-as-a-service, technology-enabled services, and print and distribution solutions to public and private companies, mutual funds, and other regulated investment firms to serve their regulatory and compliance needs. It offers technology-enabled filing solutions for corporate clients within its capital markets offerings that allow U.S. public companies to comply with applicable U.S. Securities and Exchange Commission regulations, including filing agent services, digital document creation, and online content management tools that support their corporate financial transactions and regulatory reporting; solutions to facilitate clients' communications with their shareholders; and virtual data rooms and other deal management solutions. The company also provides technology-enabled filing solutions for alternative investment and insurance investment companies, including cloud-based tools for creating and filing high-quality regulatory documents, as well as solutions for investors designed to improve the speed and accuracy of their access to investment information. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.

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