Head-To-Head Review: ACCO Brands (ACCO) & Deluxe (DLX)

ACCO Brands (NYSE: ACCO) and Deluxe (NYSE:DLX) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Dividends

ACCO Brands pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. Deluxe pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. ACCO Brands pays out 20.2% of its earnings in the form of a dividend. Deluxe pays out 22.8% 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. ACCO Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.



Insider and Institutional Ownership

94.9% of ACCO Brands shares are held by institutional investors. Comparatively, 94.3% of Deluxe shares are held by institutional investors. 4.5% of ACCO Brands shares are held by insiders. Comparatively, 2.4% of Deluxe shares are held by 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 ACCO Brands and Deluxe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ACCO Brands 6.76% 17.97% 4.68%
Deluxe 11.71% 26.80% 11.76%

Analyst Ratings

This is a breakdown of current recommendations and price targets for ACCO Brands and Deluxe, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ACCO Brands 0 1 1 0 2.50
Deluxe 0 0 1 0 3.00

ACCO Brands presently has a consensus target price of $15.50, indicating a potential upside of 20.16%. Given ACCO Brands’ higher possible upside, equities research analysts plainly believe ACCO Brands is more favorable than Deluxe.

Volatility & Risk

ACCO Brands has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Deluxe has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Earnings and Valuation

This table compares ACCO Brands and Deluxe’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ACCO Brands $1.95 billion 0.70 $131.70 million $1.19 10.84
Deluxe $1.97 billion 1.80 $230.15 million $5.27 13.99

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

Summary

Deluxe beats ACCO Brands on 9 of the 15 factors compared between the two stocks.

About ACCO Brands

ACCO Brands Corporation designs, manufactures, and markets, consumer and business products. It operates through three segments: ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands International. The company offers school notebooks, calendars, and whiteboards; storage and organization products, such as lever-arch binders, sheet protectors, and indexes; stapling, punching, laminating, binding, and shredding products; do-it-yourself tools; and computer accessories and others, which are primarily used in schools, homes, and businesses. The company offers its products primarily under the AT-A-GLANCE, Five Star, GBC, Hilroy, Kensington, Mead, Quartet, Swingline, Derwent, Esselte, Leitz, NOBO, Rapid, Rexel, Artline, Marbig, Tilibra, and Wilson Jones brands. ACCO Brands Corporation markets and sells its products through various channels, including mass retailers; e-tailers; discount, drug/grocery, and variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; and contract stationers, as well as sells products directly to commercial and consumer end-users through its e-commerce platform and direct sales organization. The company is headquartered in Lake Zurich, Illinois.

About Deluxe

Deluxe Corporation provides checks, forms, marketing solutions, accessories, and other products and services for small businesses and financial institutions. It operates through three segments: Small Business Services, Financial Services, and Direct Checks. The company provides checks; printed forms, such as deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices, and personnel forms, as well as computer forms and check registers; and accessories and other products comprising envelopes, office supplies, ink stamps, and labels, as well as checkbook covers. It also offers Web services, which include logo and Web design; hosting, domain name, and web design services; search engine optimization; marketing programs, including email, mobile, and social media, and other self-service marketing solutions; and fraud protection and security, online and offline payroll services, and electronic checks. In addition, the company provides financial technology solutions larger financial institutions, which comprise data-driven marketing solutions, including outsourced marketing campaign targeting and execution; treasury management solutions comprising accounts receivable processing and remote deposit capture; and digital enablement solutions consisting of loyalty and rewards programs. It operates in the North America, Australia, South America, and Europe. The company was formerly known as Deluxe Check Printers, Incorporated and changed its name to Deluxe Corporation in 1988. Deluxe Corporation was founded in 1915 and is headquartered in Shoreview, Minnesota.

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