Head-To-Head Survey: Neenah (NP) and International Paper (IP)

International Paper (NYSE: IP) and Neenah (NYSE:NP) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Profitability

This table compares International Paper and Neenah’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
International Paper 11.57% 28.21% 4.85%
Neenah 7.86% 18.73% 8.52%

Institutional and Insider Ownership

82.1% of International Paper shares are owned by institutional investors. Comparatively, 90.5% of Neenah shares are owned by institutional investors. 0.3% of International Paper shares are owned by insiders. Comparatively, 2.0% of Neenah shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares International Paper and Neenah’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
International Paper $21.74 billion 1.06 $2.14 billion $3.49 15.88
Neenah $979.90 million 1.44 $80.30 million $4.32 19.47

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.

Volatility and Risk

International Paper has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, Neenah has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Dividends

International Paper pays an annual dividend of $1.90 per share and has a dividend yield of 3.4%. Neenah pays an annual dividend of $1.64 per share and has a dividend yield of 2.0%. International Paper pays out 54.4% of its earnings in the form of a dividend. Neenah pays out 38.0% 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. International Paper has increased its dividend for 6 consecutive years and Neenah has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for International Paper and Neenah, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
International Paper 1 4 9 0 2.57
Neenah 0 1 0 0 2.00

International Paper currently has a consensus price target of $65.33, indicating a potential upside of 17.86%. Given International Paper’s stronger consensus rating and higher possible upside, equities analysts plainly believe International Paper is more favorable than Neenah.

Summary

International Paper beats Neenah on 9 of the 17 factors compared between the two stocks.

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.

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.

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