Analyzing RealD (NYSE:RLD) and Essendant (ESND)

RealD (NYSE: RLD) and Essendant (NASDAQ:ESND) are both small-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Institutional & Insider Ownership

91.9% of Essendant shares are owned by institutional investors. 1.6% of Essendant shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for RealD and Essendant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RealD 0 0 0 0 N/A
Essendant 0 2 0 0 2.00

Essendant has a consensus target price of $16.50, suggesting a potential upside of 42.24%. Given Essendant’s higher possible upside, analysts plainly believe Essendant is more favorable than RealD.

Dividends

Essendant pays an annual dividend of $0.56 per share and has a dividend yield of 4.8%. RealD does not pay a dividend. Essendant pays out -13.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares RealD and Essendant’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RealD N/A N/A N/A N/A N/A
Essendant $5.19 billion 0.08 $147.50 million ($4.08) -2.84

Essendant has higher revenue and earnings than RealD.

Profitability

This table compares RealD and Essendant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RealD -8.50% -11.24% -6.77%
Essendant -2.87% 5.75% 1.93%

Summary

Essendant beats RealD on 9 of the 9 factors compared between the two stocks.

RealD Company Profile

RealD Inc. (RealD) is a licensor of three dimensional (3D) and other visual technologies. The Company’s property portfolio is used in applications that enable a viewing experience in the theater, the home and elsewhere. The Company licenses its RealD Cinema Systems to motion picture exhibitors that show 3D motion pictures and alternative 3D content. The Company operates in three segments: cinema, consumer electronics and professional. It also provides certain of its technologies to consumer electronics manufacturers and content distributors. It licenses 3D technologies for use in professional and other non-theatrical applications. The Company’s visual technology is used in different applications and businesses, including entertainment, consumer electronics, education, aerospace, defense and healthcare. As of March 31, 2015, the Company’s RealD Cinema Systems were deployed on approximately 26,700 theater screens in 70 countries.

Essendant Company Profile

Essendant Inc. (Essendant) is a wholesale distributor of workplace items. The Company’s product portfolio includes Janitorial, Foodservice and Breakroom Supplies (JanSan), Technology Products, Traditional Office Products, Industrial Supplies, Cut Sheet Paper Products, Automotive Products and Office Furniture. It operates principally within the United States, with additional operations in Canada and Dubai, the United Arab Emirates (UAE). As of December 31, 2016, the Company provided access to over 22,000 items in these lines: janitorial supplies (cleaners and cleaning accessories), breakroom items (food and beverage products), foodservice consumables (such as disposable cups, plates and utensils), safety and security items, and paper and packaging supplies. As of December 31, 2016, the Company provided access to approximately 11,000 items, including imaging supplies, data storage, digital cameras, computer accessories and computer hardware items, such as printers and other peripherals.

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