Mercer International (NASDAQ: MERC) and Fibria (NYSE:FBR) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.
This is a summary of current ratings and price targets for Mercer International and Fibria, as provided by MarketBeat.
||Strong Buy Ratings
Mercer International currently has a consensus target price of $16.19, suggesting a potential upside of 22.63%. Fibria has a consensus target price of $16.25, suggesting a potential downside of 16.54%. Given Mercer International’s stronger consensus rating and higher possible upside, research analysts clearly believe Mercer International is more favorable than Fibria.
Mercer International pays an annual dividend of $0.50 per share and has a dividend yield of 3.8%. Fibria pays an annual dividend of $0.19 per share and has a dividend yield of 1.0%. Mercer International pays out 46.3% of its earnings in the form of a dividend. Fibria pays out 30.6% 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.
Insider and Institutional Ownership
76.7% of Mercer International shares are held by institutional investors. Comparatively, 7.3% of Fibria shares are held by institutional investors. 4.9% of Mercer International shares are held by insiders. Comparatively, 40.2% of Fibria shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Mercer International and Fibria’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Valuation & Earnings
This table compares Mercer International and Fibria’s revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Fibria has higher revenue and earnings than Mercer International. Mercer International is trading at a lower price-to-earnings ratio than Fibria, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Mercer International has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Fibria has a beta of -0.1, meaning that its share price is 110% less volatile than the S&P 500.
Mercer International beats Fibria on 8 of the 15 factors compared between the two stocks.
Mercer International Company Profile
Mercer International Inc. is a producer of northern bleached softwood kraft (NBSK) pulp, which is pulp that is sold on the open market. The Company also produces and sells tall oil, a by-product of its production process, which is used as both a chemical additive and as a green energy source. It produces and sells NBSK pulp, which is a bleached kraft pulp manufactured using northern softwood. As of December 31, 2016, the Company operated two mills in Eastern Germany and one mill in Western Canada. As of December 31, 2016, its three NBSK pulp mills had consolidated annual production capacity of approximately 1.5 million air-dried metric tons (ADMTs) of NBSK pulp and were capable of generating 305 megawatts (MW) of electricity. Additionally, its German mills generate tall oil from black liquor, which is sold to third parties for use in various applications, including bio-fuels. The Company’s mills generate and sell energy to regional utilities.
Fibria Company Profile
Fibria Celulose S.A. produces, sells, and exports short fiber pulp in Brazil and internationally. It manufactures and sells bleached eucalyptus kraft pulp. The company has approximately 1,056,000 hectares of forest base in the states of São Paulo, Minas Gerais, Rio de Janeiro, Espírito Santo, Mato Grosso do Sul, and Bahia. It also exports its products to approximately 35 countries for educational, health, hygiene, and cleaning products. The company was formerly known as Votorantim Celulose e Papel S.A. and changed its name to Fibria Celulose S.A. in November 2009. Fibria Celulose S.A. was founded in 1988 and is headquartered in São Paulo, Brazil.
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