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What: Shares of R.R. Donnelly & Sons (NYSE:RRD) were stacking higher, gaining as much as 17% after an impressive second-quarter earnings report.

So what: The packaging and printing specialist hit a two-year high as adjusted earnings per share reached $0.45, better than estimates of $0.42. Sales also improved 1.7% to $2.6 billion, better than expectations as well. R.R. Donnelly reaffirmed its guidance for the year, with improving free cash flow, and garnering confidence from the market. Organic revenue declined 0.8% in the quarter, but that's still an improvement from previous quarters as the printing industry continues to wilt.

Now what: With R.R. Donnelly's dividend yield near 6%, it's clear what investors are after here. The solid growth in free cash flow will help keep those quarterly checks rolling in, but otherwise, the company's appeal to investors seems limited. Shares have more than doubled this year, but seem like they could be ready for a breather as this is essentially a no-growth company with a double-digit forward P/E. Dividend investors may look this stock, but otherwise I'd look for more growth.


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