Resolute Forest Products (NYSE: RFP) and Schweitzer-Mauduit International (NYSE:SWM) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Risk and Volatility
Resolute Forest Products has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500. Comparatively, Schweitzer-Mauduit International has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.
Schweitzer-Mauduit International pays an annual dividend of $1.72 per share and has a dividend yield of 4.4%. Resolute Forest Products does not pay a dividend. Schweitzer-Mauduit International pays out 54.1% of its earnings in the form of a dividend. Schweitzer-Mauduit International has raised its dividend for 6 consecutive years.
This table compares Resolute Forest Products and Schweitzer-Mauduit International’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|Resolute Forest Products
Institutional & Insider Ownership
88.3% of Resolute Forest Products shares are held by institutional investors. Comparatively, 86.8% of Schweitzer-Mauduit International shares are held by institutional investors. 1.1% of Resolute Forest Products shares are held by company insiders. Comparatively, 1.8% of Schweitzer-Mauduit International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Resolute Forest Products and Schweitzer-Mauduit International’s gross revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
|Resolute Forest Products
Schweitzer-Mauduit International has lower revenue, but higher earnings than Resolute Forest Products.
This is a breakdown of current ratings and recommmendations for Resolute Forest Products and Schweitzer-Mauduit International, as provided by MarketBeat.com.
||Strong Buy Ratings
|Resolute Forest Products
Resolute Forest Products presently has a consensus target price of $9.08, indicating a potential downside of 3.37%. Schweitzer-Mauduit International has a consensus target price of $47.00, indicating a potential upside of 19.99%. Given Schweitzer-Mauduit International’s stronger consensus rating and higher probable upside, analysts clearly believe Schweitzer-Mauduit International is more favorable than Resolute Forest Products.
Schweitzer-Mauduit International beats Resolute Forest Products on 11 of the 16 factors compared between the two stocks.
Resolute Forest Products Company Profile
Resolute Forest Products Inc. operates in the forest products industry in the United States, Canada, Mexico, and internationally. The company operates in five segments: Market Pulp, Tissue, Wood Products, Newsprint, and Specialty Papers. The Market Pulp segment offers market, recycled bleached Kraft, and bleached hardwood Kraft pulp used to make a range of consumer products, including tissue, packaging, specialty paper products, diapers, and other absorbent products. The Tissue segment provides tissue products, such as recycled and virgin paper products for the away-from-home and at-home markets; and sells roll products. The Wood Products segment produces construction-grade and spruce-pine-fir lumber products, bed frame components, finger joints, and furring strips, as well as I-joists. The Newsprint segment offers newsprint and sells to newspaper publishers worldwide, as well as to commercial printers in North America for a range of uses comprising inserts and flyers. The Specialty Papers segment offers various specialty papers, including uncoated mechanical papers, such as supercalendered and white papers, as well as coated mechanical papers and uncoated freesheet papers. Its specialty papers are used in books, retail inserts, direct mail, coupons, magazines, catalogs, bags, and other commercial printing applications. This segment sells specialty papers to commercial printers, direct mailers, publishers, catalogers, and retailers. The company also produces electricity at seven cogeneration facilities and seven hydroelectric dams. Resolute Forest Products Inc. is headquartered in Montréal, Canada.
Schweitzer-Mauduit International Company Profile
Schweitzer-Mauduit International, Inc., together with its subsidiaries, provides engineered solutions and advanced materials for various industries worldwide. The company operates through two segments, Engineered Papers and Advanced Materials & Structures. The Engineered Papers segment produces and sells cigarette papers, reconstituted tobacco leaf, and wrapper and binder products to cigarette and cigar manufacturers; and other non-tobacco paper products. It also offers low ignition propensity cigarette paper; and lightweight papers for printing and writing, flooring laminates, and food service packaging. The Advanced Materials & Structures segment manufactures resin-based nets, films, and other non-wovens for filtration, infrastructure and construction, transportation, medical, and industrial applications. Schweitzer-Mauduit International, Inc. was founded in 1995 and is headquartered in Alpharetta, Georgia.
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