Reviewing VeriSign (NASDAQ:VRSN) & Donnelley Financial Solutions (NYSE:DFIN)

VeriSign (NASDAQ:VRSN) and Donnelley Financial Solutions (NYSE:DFIN) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Volatility and Risk

VeriSign has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Donnelley Financial Solutions has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Profitability

This table compares VeriSign and Donnelley Financial Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VeriSign	50.05%	-40.87%	55.90%
Donnelley Financial Solutions	10.87%	20.03%	10.17%

Institutional and Insider Ownership

92.9% of VeriSign shares are owned by institutional investors. Comparatively, 93.8% of Donnelley Financial Solutions shares are owned by institutional investors. 0.8% of VeriSign shares are owned by insiders. Comparatively, 4.3% of Donnelley Financial Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares VeriSign and Donnelley Financial Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VeriSign	$1.56 billion	15.92	$785.70 million	$8.38	31.67
Donnelley Financial Solutions	$781.90 million	1.81	$92.40 million	$3.02	16.91

VeriSign has higher revenue and earnings than Donnelley Financial Solutions. Donnelley Financial Solutions is trading at a lower price-to-earnings ratio than VeriSign, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for VeriSign and Donnelley Financial Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VeriSign	0	0	2	1	3.33
Donnelley Financial Solutions	0	0	3	0	3.00

VeriSign currently has a consensus target price of $277.50, suggesting a potential upside of 4.57%. Donnelley Financial Solutions has a consensus target price of $71.33, suggesting a potential upside of 39.68%. Given Donnelley Financial Solutions’ higher possible upside, analysts plainly believe Donnelley Financial Solutions is more favorable than VeriSign.

Summary

VeriSign beats Donnelley Financial Solutions on 9 of the 15 factors compared between the two stocks.

About VeriSign

VeriSign, Inc., together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which supports global e-commerce. It operates directory for .name and .cc; and back-end systems for .edu, domain names. VeriSign, Inc. was incorporated in 1995 and is headquartered in Reston, Virginia.

About Donnelley Financial Solutions

Donnelley Financial Solutions, Inc. provides innovative software and technology-enabled financial regulatory and compliance solutions in the United States, Asia, Europe, Canada, and internationally. It operates through four segments: Capital Markets Software Solutions (CM-SS); Capital Markets Compliance and Communications Management (CM-CCM); Investment Companies Software Solutions (IC-SS); and Investment Companies Compliance and Communications Management (IC-CCM). The CM-SS segment provides Venue and ActiveDisclosure solutions to public and private companies to manage public and private transactional and compliance processes; collaborate; and tag, validate, and file SEC documents. The CM-CCM segment offers tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro, and ArcRegulatory, as well as services that enable storage and management of compliance and regulatory information in a self-service and central repository for accessing, assembling, editing, translating, rendering, and submitting documents to regulators and investors. The IC-CCM segment offers tech-enabled solutions for creating, filing and distributing regulatory communications, and solutions for investor communications, as well as XBRL and iXBRL-formatted filings pursuant for Investment Company Act through the SEC’s EDGAR system. This segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review, and expert support. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.