Neenah (NYSE: NP) and International Paper (NYSE:IP) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.
Neenah pays an annual dividend of $1.64 per share and has a dividend yield of 2.0%. International Paper pays an annual dividend of $1.90 per share and has a dividend yield of 3.3%. Neenah pays out 38.0% of its earnings in the form of a dividend. International Paper pays out 54.4% 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 and International Paper has raised its dividend for 6 consecutive years.
Valuation & Earnings
This table compares Neenah and International Paper’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Neenah||$979.90 million||1.41||$80.30 million||$4.32||19.04|
|International Paper||$21.74 billion||1.09||$2.14 billion||$3.49||16.45|
International Paper has higher revenue and earnings than Neenah. International Paper is trading at a lower price-to-earnings ratio than Neenah, indicating that it is currently the more affordable of the two stocks.
This table compares Neenah and International Paper’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Neenah has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, International Paper has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.
Institutional & Insider Ownership
90.5% of Neenah shares are owned by institutional investors. Comparatively, 82.1% of International Paper shares are owned by institutional investors. 1.5% of Neenah shares are owned by company insiders. Comparatively, 0.3% of International Paper shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of current ratings and target prices for Neenah and International Paper, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
International Paper has a consensus target price of $65.33, suggesting a potential upside of 13.79%. Given International Paper’s stronger consensus rating and higher possible upside, analysts plainly believe International Paper is more favorable than Neenah.
International Paper beats Neenah on 9 of the 17 factors compared between the two stocks.
Neenah Company Profile
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.
International Paper Company Profile
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.
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