Head to Head Review: RPM International (RPM) versus Rayonier (RYN)

RPM International (NYSE: RPM) and Rayonier (NYSE:RYN) are both mid-cap construction companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Institutional & Insider Ownership

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75.9% of RPM International shares are held by institutional investors. Comparatively, 84.3% of Rayonier shares are held by institutional investors. 2.1% of RPM International shares are held by insiders. Comparatively, 0.6% of Rayonier shares are held 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 & Valuation

This table compares RPM International and Rayonier’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RPM International $4.96 billion 1.34 $181.82 million $2.59 19.16
Rayonier $819.60 million 5.60 $148.84 million $1.16 30.66

RPM International has higher revenue and earnings than Rayonier. RPM International is trading at a lower price-to-earnings ratio than Rayonier, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

RPM International has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Rayonier has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for RPM International and Rayonier, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RPM International 1 4 2 0 2.14
Rayonier 0 3 1 0 2.25

RPM International currently has a consensus target price of $54.00, indicating a potential upside of 8.81%. Rayonier has a consensus target price of $32.67, indicating a potential downside of 8.14%. Given RPM International’s higher probable upside, equities research analysts clearly believe RPM International is more favorable than Rayonier.

Dividends

RPM International pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. Rayonier pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. RPM International pays out 49.4% of its earnings in the form of a dividend. Rayonier pays out 86.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RPM International has raised its dividend for 43 consecutive years.

Profitability

This table compares RPM International and Rayonier’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RPM International 6.80% 25.05% 7.36%
Rayonier 18.64% 4.96% 2.84%

Summary

RPM International beats Rayonier on 11 of the 17 factors compared between the two stocks.

About RPM International

RPM International Inc., through its subsidiaries, manufactures, markets and sells various specialty chemical product lines, including specialty paints, protective coatings, roofing systems, sealants and adhesives, focusing on the maintenance of industrial, specialty and consumer markets. The Company operates through three segments: the industrial reportable segment (industrial segment), the specialty reportable segment (specialty segment) and the consumer reportable segment (consumer segment). Its family of products includes those marketed under brand names, such as API, Carboline, CAVE, DAP, Day-Glo, Dri-Eaz, Dryvit, Euclid, EUCO, Fibergrate, Flecto, Flowcrete, Grupo PV, Hummervoll, illbruck, Mohawk, Rust-Oleum, Stonhard, TCI, Toxement, Tremco, Tuf-Strand, Universal Sealants, Viapol, Watco and Zinsser. As of May 31, 2016, its subsidiaries marketed products in approximately 164 countries and territories, and operated manufacturing facilities in approximately 120 locations.

About Rayonier

Rayonier Inc. is a timberland real estate investment trust with assets located in some of the timber growing regions in the United States and New Zealand. The Company operates through five segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate and Trading. The Southern Timber, Pacific Northwest Timber and New Zealand Timber segments reflect all activities related to the harvesting of timber and other activities, such as recreational leases, within each respective geography. Its New Zealand Timber segment also reflects land sales that occur within its New Zealand portfolio. Its Real Estate segment reflects the United States land sales. Its Trading segment reflects the log trading activities that support its New Zealand operations. It owned, leased or managed approximately 2.7 million acres of timberlands, as of December 31, 2016. It is engaged in the trading of logs from New Zealand and Australia to Pacific Rim markets.

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