Kimberly-Clark (NYSE: KMB) and Sappi (OTCMKTS:SPPJY) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.
Kimberly-Clark pays an annual dividend of $4.00 per share and has a dividend yield of 4.0%. Sappi pays an annual dividend of $0.14 per share and has a dividend yield of 2.1%. Kimberly-Clark pays out 64.2% of its earnings in the form of a dividend. Sappi pays out 21.9% 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. Kimberly-Clark has increased its dividend for 45 consecutive years. Kimberly-Clark is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Kimberly-Clark has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Sappi has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.
This is a summary of current recommendations for Kimberly-Clark and Sappi, as reported by MarketBeat.com.
||Strong Buy Ratings
Kimberly-Clark currently has a consensus price target of $123.21, indicating a potential upside of 23.18%. Given Kimberly-Clark’s higher possible upside, analysts plainly believe Kimberly-Clark is more favorable than Sappi.
Earnings and Valuation
This table compares Kimberly-Clark and Sappi’s top-line revenue, earnings per share and valuation.
||Earnings Per Share
Kimberly-Clark has higher revenue and earnings than Sappi. Sappi is trading at a lower price-to-earnings ratio than Kimberly-Clark, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
74.6% of Kimberly-Clark shares are held by institutional investors. Comparatively, 0.0% of Sappi shares are held by institutional investors. 0.6% of Kimberly-Clark shares are held by company insiders. Comparatively, 0.7% of Sappi shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Kimberly-Clark and Sappi’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Kimberly-Clark beats Sappi on 13 of the 16 factors compared between the two stocks.
Kimberly-Clark Corp. is engaged in the manufacturing and marketing of products made from natural or synthetic fibers. It operates through the following segments: Personal Care, Consumer Tissue, and K-C Professional. The Personal Care segment manufactures and markets disposable diapers, training and youth pants, swim pants, baby wipes, feminine and incontinence care products, and other related products. The Consumer Tissue segment produces and sells facial and bathroom tissue, paper towels, napkins and related products for household use. The K-C Professional segment involves in the provision of wipers, tissue, towels, apparel, soaps and sanitizers. The company was founded by John A. Kimberly, Havilah Babcock, Charles B. Clark, and Frank C. Shattuck in 1872 and is headquartered in Irving, TX.
Sappi Limited is a woodfiber company focused on providing graphic/printing papers, packaging and specialty papers, dissolving wood pulp (DWP), as well as products in adjacent fields, including nanocellulose and lignosulfonate. The Company’s segments include North America, Europe and Southern Africa. Its range of graphic paper products is used by printers in the production of books, brochures, magazines, catalogues, direct mail and various other print applications; packaging and specialty papers are used in the manufacture of such products as soup sachets, carry bags, cosmetic and confectionery packaging, boxes for agricultural products for export, tissue wadding for household tissue products and casting release papers used by suppliers to the fashion, textiles, automobile and household industries, and DWP products are used around the world by converters to create viscose fiber for clothing and textiles, pharmaceutical products, as well as a range of consumer and household products.
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