R.R. Donnelley & Sons Co. : RRD-US: Dividend Analysis : September 23rd, 2016 (record date) : By the numbers : October 18, 2016

Our analysis is based on comparing R.R. Donnelley & Sons Co. with the following peers – InnerWorkings, Inc., Multi-Color Corporation, Deluxe Corporation, Cimpress N.V., Quad/Graphics, Inc. Class A, Thomson Reuters Corporation, Cenveo, Inc. and TEGNA, Inc. (INWK-US, LABL-US, DLX-US, CMPR-US, QUAD-US, TRI-US, CVO-US and TGNA-US).

R.R. Donnelley & Sons Co.’s dividend yield is 15.87 percent and its dividend payout is 196.23 percent. This compares to a peer median dividend yield of 3.11 percent and a payout level of 25.59 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 42 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to June 30, 2016), RRD-US paid a low quality dividend, which represents a yield of 15.87% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were high quality and 3 were low quality.
  • The ending cash balance, with a dividend coverage of 1.34x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to June 30, 2016), RRD-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 2.26x), investing cash flow (coverage of -0.82x), issuance cash flow (coverage of -0.36x) and twelve-month prior cash (coverage of 1.36x), for a total dividend coverage of 2.34x.

RRD-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.53x).

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2011-12-31 2012-12-31 2013-12-31 2014-12-31 2015-12-31 Latest
Dividend Yield (%) 7.97 11.54 5.11 6.05 6.92 15.87
Dividend Payout (%) -165.08 -28.81 90.43 176.27 142.47 196.23

A complete list of metrics and analysis is available on the company page.

Company Profile

R.R. Donnelley & Sons Co. engages in the provision of multichannel communication solutions. It operates through the following segments: Publishing and Retail Services, Variable Print, Strategic Services, International, and Corporate, The Publishing and Retail Services segment offers magazines, catalogs, retail inserts, books, directories, and packaging. The Variable Print segment includes commercial and digital print, office products, direct mail, labels, statement printing, forms, and packaging. The Strategic Services segment provides logistics services, financial print products and related services, print management offerings, digital and creative solutions, and book publishing. The International segment comprises of magazines, catalogs, retail inserts, books, directories, direct mail, packaging, forms, labels, manuals, statement printing, commercial and digital print, logistics services, and digital and creative solutions. It also deals with business process outsourcing and Global Turnkey Solutions operations. The Corporate segment comprises of unallocated selling, general and administrative activities, and associated expenses including, in part, executive, legal, finance, communications, certain facility costs and last in, first out inventory provisions. The company was founded by Richard Robert Donnelley in 1864 and is headquartered in Chicago, IL.


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