Reviewing Rayonier Advanced Materials (RYAM) and Sealed Air (SEE)

Rayonier Advanced Materials (NYSE: RYAM) and Sealed Air (NYSE:SEE) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

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This table compares Rayonier Advanced Materials and Sealed Air’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rayonier Advanced Materials $961.00 million 1.15 $324.96 million $0.97 21.99
Sealed Air $4.46 billion 1.59 $814.90 million $1.81 23.41

Sealed Air has higher revenue and earnings than Rayonier Advanced Materials. Rayonier Advanced Materials is trading at a lower price-to-earnings ratio than Sealed Air, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

94.2% of Rayonier Advanced Materials shares are held by institutional investors. Comparatively, 98.3% of Sealed Air shares are held by institutional investors. 2.1% of Rayonier Advanced Materials shares are held by company insiders. Comparatively, 1.1% of Sealed Air shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Rayonier Advanced Materials and Sealed Air, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rayonier Advanced Materials 0 1 4 0 2.80
Sealed Air 0 7 5 0 2.42

Rayonier Advanced Materials presently has a consensus price target of $20.20, indicating a potential downside of 5.30%. Sealed Air has a consensus price target of $50.30, indicating a potential upside of 18.72%. Given Sealed Air’s higher possible upside, analysts plainly believe Sealed Air is more favorable than Rayonier Advanced Materials.

Dividends

Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Sealed Air pays an annual dividend of $0.64 per share and has a dividend yield of 1.5%. Rayonier Advanced Materials pays out 28.9% of its earnings in the form of a dividend. Sealed Air pays out 35.4% 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. Sealed Air has increased its dividend for 2 consecutive years. Sealed Air is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Rayonier Advanced Materials has a beta of 3.52, suggesting that its share price is 252% more volatile than the S&P 500. Comparatively, Sealed Air has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Profitability

This table compares Rayonier Advanced Materials and Sealed Air’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rayonier Advanced Materials 33.92% 16.99% 3.33%
Sealed Air 17.90% 74.28% 5.22%

Summary

Sealed Air beats Rayonier Advanced Materials on 12 of the 17 factors compared between the two stocks.

Rayonier Advanced Materials Company Profile

Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.

Sealed Air Company Profile

Sealed Air Corporation is engaged in food safety and security, facility hygiene and product protection business. The Company’s segments are Food Care (includes Corporate, Medical Applications and New Ventures businesses), Product Care and Corporate. The Food Care segment focuses on providing a range of integrated system solutions. The Food Care business serves primarily perishable food and beverage processors, predominately in fresh red meat, smoked and processed meats, beverages, poultry and dairy (solids and liquids) markets throughout the world. The Product Care segment provides customers with a range of Product Care solutions to meet cushioning, void fill, surface protection, retail display, containment and dunnage needs.

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