Critical Contrast: IHS Markit (INFO) versus Donnelley Financial Solutions (DFIN)
IHS Markit (NASDAQ: INFO) and Donnelley Financial Solutions (NYSE:DFIN) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.
This is a breakdown of recent ratings and price targets for IHS Markit and Donnelley Financial Solutions, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Donnelley Financial Solutions||0||3||1||0||2.25|
IHS Markit presently has a consensus price target of $47.75, suggesting a potential upside of 4.81%. Donnelley Financial Solutions has a consensus price target of $23.33, suggesting a potential upside of 15.91%. Given Donnelley Financial Solutions’ higher possible upside, analysts clearly believe Donnelley Financial Solutions is more favorable than IHS Markit.
This table compares IHS Markit and Donnelley Financial Solutions’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Donnelley Financial Solutions||3.26%||32.44%||4.78%|
Institutional & Insider Ownership
99.2% of IHS Markit shares are owned by institutional investors. Comparatively, 85.7% of Donnelley Financial Solutions shares are owned by institutional investors. 1.6% of Donnelley Financial Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares IHS Markit and Donnelley Financial Solutions’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|IHS Markit||$2.73 billion||6.65||$152.80 million||$0.96||47.46|
|Donnelley Financial Solutions||$983.50 million||0.69||$59.10 million||$0.99||20.33|
IHS Markit has higher revenue and earnings than Donnelley Financial Solutions. Donnelley Financial Solutions is trading at a lower price-to-earnings ratio than IHS Markit, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
IHS Markit has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Donnelley Financial Solutions has a beta of 2.77, meaning that its share price is 177% more volatile than the S&P 500.
IHS Markit beats Donnelley Financial Solutions on 9 of the 14 factors compared between the two stocks.
About IHS Markit
IHS Markit Ltd., formerly Markit Ltd., is a provider of critical information and analytics for the major industries, financial markets and governments. The Company operates through four segments: Resources, Transportation, Consolidated Markets & Solutions (CMS) and Financial Services. The Resources segment includes its energy and chemicals product offerings. Its energy offerings are focused on upstream, midstream, downstream and power/gas/coal/renewables (PGCR) services. The Transportation segment includes its aerospace, defense and security (AD&S); automotive, and maritime and trade (M&T) product offerings. The CMS segment includes its product design; technology, media and telecommunication, and economics and country risk (ECR) product offerings. The Company’s Financial Services segment provides pricing and reference data, indices, valuation and trading services, trade processing, enterprise software and managed services.
About Donnelley Financial Solutions
Donnelley Financial Solutions, Inc. is a financial communications services company that supports global capital markets compliance and transaction needs for its corporate clients and their advisors (such as law firms and investment bankers), and global investment markets compliance and analytics needs for mutual fund companies, variable annuity providers and broker/dealers. The Company provides content management, multi-channel content distribution, data management and analytics services, collaborative workflow and business reporting tools, and translations and other language services in support of its clients’ communications requirements. The Company operates in two business segments: United States and International. The United States segment consists of three reporting units: capital markets, investment markets, and language solutions and other. The International segment includes its operations in Asia, Europe, Latin America and Canada.
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