R.R. Donnelley & Sons CompanyRRD

Morningstar Rating

Stock Research and Analysis

by Morningstar Equity Analysts

R.R. Donnelley & Sons has built a profitable enterprise in commercial printing, a highly competitive and fragmented industry. While it has grown into an industry leader, we don't think the company has an economic moat.

In the U.S. commercial printing Read more

Bulls Say

As the world's largest commercial printer, Donnelley's diversified customer base includes most Fortune 500 companies. No client accounts for more than 10% of sales.

The company returns capital to shareholders through an annual dividend, currently $1.04 per share.

By selectively purchasing smaller companies that employ new printing and document technologies, Donnelley gives itself an edge over companies that don't have the same economies of scale. Read more

Bears Say

The company has limited ability to set the prices it pays for raw materials and suppliers. Passing these higher costs on to customers could result in a pullback in order volume.

Donnelley's acquisition binge could leave the company vulnerable to a misstep. The company has a history of noncash charges related to overpaying for acquisitions.

Significant postal rate increases could hurt Donnelley, particularly its direct-mail business. Read more

Strategy

Donnelley seeks to maintain its industry-leading position by increasing its focus on profitable, higher-growth areas such as business services and digital document management. By buying smaller companies Read more

Management

In May 2007, Thomas Quinlan took the reins from retiring CEO Mark Angelson, who led the company through a series of acquisitions in the previous four years. We're not concerned about the change in leadership. Quinlan most recently served as CFO and Read more

Profile

R.R. Donnelley is the world's largest commercial printer, with 65,000 employees and more than $11 billion in annual sales. Donnelley prints everything from business forms Read more

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