Quad Graphics (NYSE:QUAD) versus Liquidity Services (NASDAQ:LQDT) Critical Survey

Liquidity Services (NASDAQ:LQDT) and Quad Graphics (NYSE:QUAD) are both small-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Risk & Volatility

Liquidity Services has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Quad Graphics has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Valuation and Earnings

This table compares Liquidity Services and Quad Graphics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidity Services	$489.62 million	2.67	$28.09 million	$1.02	40.83
Quad Graphics	$2.42 billion	0.22	$27.00 million	$0.63	16.18

Liquidity Services has higher earnings, but lower revenue than Quad Graphics. Quad Graphics is trading at a lower price-to-earnings ratio than Liquidity Services, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

71.2% of Liquidity Services shares are held by institutional investors. Comparatively, 39.5% of Quad Graphics shares are held by institutional investors. 28.1% of Liquidity Services shares are held by insiders. Comparatively, 14.2% of Quad Graphics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Liquidity Services and Quad Graphics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidity Services	6.79%	17.60%	9.86%
Quad Graphics	1.31%	47.90%	4.61%

Analyst Ratings

This is a summary of recent recommendations for Liquidity Services and Quad Graphics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidity Services	0	0	2	1	3.33
Quad Graphics	0	1	3	1	3.00

Liquidity Services currently has a consensus target price of $50.00, indicating a potential upside of 20.05%. Quad Graphics has a consensus target price of $12.00, indicating a potential upside of 17.69%. Given Liquidity Services’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Liquidity Services is more favorable than Quad Graphics.

Summary

Liquidity Services beats Quad Graphics on 10 of the 14 factors compared between the two stocks.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.

About Quad Graphics

Quad/Graphics, Inc. provides marketing solutions worldwide. The company operates through United States Print and Related Services, and International segments. It offers printing services, such as retail inserts, publications, catalogs, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, and other commercial and specialty printed products; and paper procurement services. The company also provides marketing and other services, including data and analytics, technology solutions, media services, creative and content solutions, managed services, and execution in non-print channels, as well as manufactures ink. It serves blue-chip companies that operate in various industries, and serve businesses and consumers across various industry verticals comprising retail, consumer packaged goods and direct-to-consumer, as well as financial services and health. The company was founded in 1971 and is headquartered in Sussex, Wisconsin.