R.R. Donnelley and Its Nightmarish 2012

2012 is nearing its end, and now's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at R.R. Donnelley (NASDAQ: RRD  ) . The business services company had an extremely tough year, stung by a high-profile mix-up and facing a tough overall environment for publishers both online and in print. Below, you'll find more on what moved shares of R.R. Donnelley this year.

Stats on R.R. Donnelley

Year-to-Date Stock Return

(31.4%)

Market Cap

$1.63 billion

Revenue, Past 12 Months

$10.3 billion

Net Loss, Past 12 Months

($129 million)

1-Year Revenue Growth

(3%)

Dividend Yield

11.4%

CAPS Rating

**

Source: S&P Capital IQ.

Why has R.R. Donnelley been down and out?
R.R. Donnelley presents a conundrum to dividend investors. On one hand, its double-digit yield looks particularly attractive in today's low-rate environment. Yet with shares falling dramatically, the benefit of that income has been wiped out by capital losses.

The event that put Donnelley's name into the consciousness of millions of investors was unfortunately a huge error. In October, the company mistakenly filed Google's (NASDAQ: GOOGL  ) quarterly report to the SEC during the middle of the day, triggering a huge sell-off and forcing a halt in the stock's trading for much of the afternoon.

But more broadly, Donnelley has suffered from a huge debt load and weak earnings. Traditional print has been on the decline for a long time, forcing the company to seek out new avenues for profits. Despite moves into digital offerings like its purchase of Edgar Online earlier this year, positive results haven't yet materialized on Donnelley's bottom line. Moreover, competitors like Quad/Graphics (NYSE: QUAD  ) have managed to stay profitable by attacking the digital realm a lot more strongly than Donnelley has managed to date.

Still, the company has had some successes. In November, Donnelley announced that Bank of Nova Scotia (NYSE: BNS  ) had broadened its relationship for digital printing, forms, and other services. Earlier in the year, it got a multiyear agreement with Office Depot (NASDAQ: ODP  ) for catalogs and direct-mail services.

Donnelley hasn't inspired investors in 2012 with its turnaround attempts. To improve its prospects next year, Donnelley will have to work harder to get out of what many consider to be a dying business.

Did Donnelley hurt Google?
The filing fiasco certainly didn't enamor Google with Donnelley, but it's unlikely to hold back the online search giant from its Internet dominance. Yet Google is struggling to adapt to an increasingly mobile world. Find out whether Google is a buy in The Motley Fool's new premium research report on Google, where we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource, and you'll receive a bonus year's worth of key updates and expert guidance as news continues to develop.

Click here to add R.R. Donnelley to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 26, 2012, at 4:05 PM, dwilh51183 wrote:

    GOOGLE will get whacked the next four days with huge tax selling, so sell all your shares of Google it's going to get creamed

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