Champion International Paper (NYSE: IP) and UPM (OTCMKTS:UPMKY) are both large-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.
Risk & Volatility
Champion International Paper has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, UPM has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Champion International Paper and UPM, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Champion International Paper||1||7||6||0||2.36|
Champion International Paper currently has a consensus price target of $63.25, suggesting a potential upside of 19.88%. Given Champion International Paper’s higher probable upside, research analysts plainly believe Champion International Paper is more favorable than UPM.
Champion International Paper pays an annual dividend of $1.90 per share and has a dividend yield of 3.6%. UPM pays an annual dividend of $1.18 per share and has a dividend yield of 3.2%. Champion International Paper pays out 54.4% of its earnings in the form of a dividend. UPM pays out 65.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Champion International Paper has raised its dividend for 6 consecutive years. Champion International Paper is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Champion International Paper and UPM’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Champion International Paper||$21.74 billion||1.00||$2.14 billion||$3.49||15.12|
|UPM||$11.31 billion||1.76||$1.10 billion||$1.80||20.78|
Champion International Paper has higher revenue and earnings than UPM. Champion International Paper is trading at a lower price-to-earnings ratio than UPM, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
82.5% of Champion International Paper shares are owned by institutional investors. Comparatively, 0.2% of UPM shares are owned by institutional investors. 0.3% of Champion International Paper shares are owned by insiders. Comparatively, 1.0% of UPM shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Champion International Paper and UPM’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Champion International Paper||9.36%||29.05%||4.44%|
Champion International Paper beats UPM on 11 of the 16 factors compared between the two stocks.
About Champion International Paper
International Paper Company operates as a paper and packaging company primarily in North America, Europe, Latin America, North Africa, India, and Russia. It operates through three segments: Industrial Packaging, Global Cellulose Fibers, and Printing Papers. The Industrial Packaging segment manufactures containerboards, including linerboard, medium, whitetop, recycled linerboard, recycled medium, and saturating kraft. The Global Cellulose Fibers segment provides fluff, market, and specialty pulps that are used in absorbent hygiene products, tissue and paper products, and non-absorbent end applications. The Printing Papers segment produces printing and writing papers, such as uncoated papers for end use applications, including brochures, pamphlets, greeting cards, books, annual reports, and direct mail, as well as envelopes, tablets, business forms, and file folders. This segment sells uncoated papers under the Hammermill, Springhill, Williamsburg, Postmark, Accent, Great White, Chamex, Ballet, Rey, Pol, and Svetocopy brand names. The company sells its products directly to end users and converters, as well as through agents, resellers, and paper distributors. International Paper Company was founded in 1898 and is headquartered in Memphis, Tennessee.
UPM-Kymmene Oyj operates in the forest-based bio industry. It operates through UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA, UPM Plywood, and Other Operations divisions. The company provides eucalyptus, birch, and softwood pulp grades for tissue, specialty, graphic papers, and packaging; wood-based renewable diesel and naphtha for fuel distributors and transportation industries; and sawn timber for joinery, packaging, distribution, and construction industries. It is also involved in the generation of electricity through hydro, nuclear, and condensing power plants in the Finnish and Scandinavian electricity market. In addition, the company offers self-adhesive papers and film label stocks for product and information labelling in label printers and brand owners in food, personal care, pharmaceutical, and retail segment; label papers and release liners, and fine papers, as well as label and packaging papers production lines for retailers, printers, publishers, distributors, and paper converters; and graphic papers for advertising, magazines, newspapers, and home and office to publishers, cataloguers, retailers, printers, and merchants. Further, it provides plywood and veneer products for construction, vehicle flooring, LNG shipbuilding, and other manufacturing industries; wood and forestry service for UPM mills and forest owners; and chemical building blocks, lignin products, biofibrils, and biomedical products, as well as outdoor products and composite material for construction, and granulates for injection molding and extrusion. The company was founded in 1995 and is headquartered in Helsinki, Finland.
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