UPM-Kymmene (OTCMKTS: UPMKY) and Neenah (NYSE:NP) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.
This is a breakdown of recent recommendations and price targets for UPM-Kymmene and Neenah, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
UPM-Kymmene pays an annual dividend of $1.18 per share and has a dividend yield of 3.3%. Neenah pays an annual dividend of $1.64 per share and has a dividend yield of 1.9%. UPM-Kymmene pays out 57.3% of its earnings in the form of a dividend. Neenah pays out 38.0% 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. Neenah has raised its dividend for 7 consecutive years.
This table compares UPM-Kymmene and Neenah’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
UPM-Kymmene has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Neenah has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.
Earnings and Valuation
This table compares UPM-Kymmene and Neenah’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|UPM-Kymmene||$11.31 billion||1.68||$1.10 billion||$2.06||17.28|
|Neenah||$979.90 million||1.46||$80.30 million||$4.32||19.64|
UPM-Kymmene has higher revenue and earnings than Neenah. UPM-Kymmene is trading at a lower price-to-earnings ratio than Neenah, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
0.2% of UPM-Kymmene shares are held by institutional investors. Comparatively, 90.5% of Neenah shares are held by institutional investors. 1.0% of UPM-Kymmene shares are held by insiders. Comparatively, 2.0% of Neenah shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Neenah beats UPM-Kymmene on 8 of the 14 factors compared between the two stocks.
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.
Neenah, Inc. produces and sells technical products, and fine paper and packaging products worldwide. The company's Technical Products segment offers filtration media for transportation, water, and other uses; saturated and unsaturated crepe, and flat paper tapes to manufacturers; and coated lightweight abrasive paper for automotive, construction, metal, and woodworking industries. It also provides digital image transfer media; label and tag products for variable and digital printing; latex saturated and coated papers; premask, medical packaging, publishing, and security papers; and clean room and durable printing papers, release papers, and furniture backers. Its Fine Paper and Packaging segment manufactures and sells premium writing, text, cover, and specialty papers and envelopes used in commercial printing services, corporate identity packages, and advertising collaterals. This segment also provides premium packaging products for retail, cosmetics, spirits, and electronics end-use markets; bright papers for direct mail, advertising insert, scrapbook, and marketing collateral applications; and business papers for professionals and small businesses, as well as translucent and art papers, papers for optical scanning, and other specialized applications. The company markets its products under the JET-PRO SofStretch, KIMDURA, PREVAIL, NEENAH, GESSNER, CLASSIC, CLASSIC CREST, ESSE, ENVIRONMENT, CAPITOL BOND, ROYAL SUNDANCE, SOUTHWORTH, TOUCHE, CRANE'S CREST, CRANE'S BOND, CRANE'S LETTRA, SO…SILK, PLIKE, STARDREAM, CONVERD, ESTATE LABEL, Neenah, PELLAQ, KIVAR, SKIVERTEX, ILLUSIO, SENZO, ASTROBRIGHTS, and CREATIVE COLLECTION names. It sells its products through authorized paper distributors, converters, retailers, specialty businesses, and direct sales. The company was formerly known as Neenah Paper, Inc. and changed its name to Neenah, Inc. in January 2018. Neenah, Inc. was founded in 2004 and is headquartered in Alpharetta, Georgia.
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