Contrasting Mercer International (NASDAQ:MERC) and Sugarmade (OTCMKTS:SGMD)

Mercer International (NASDAQ:MERC) and Sugarmade (OTCMKTS:SGMD) are both small-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Insider & Institutional Ownership

85.8% of Mercer International shares are held by institutional investors. 1.0% of Mercer International shares are held by insiders. Comparatively, 5.2% of Sugarmade shares are held 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.

Analyst Ratings

This is a breakdown of current ratings for Mercer International and Sugarmade, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercer International	0	4	0	0	2.00
Sugarmade	0	0	0	0	0.00

Mercer International presently has a consensus target price of $4.50, indicating a potential upside of 49.01%. Given Mercer International’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Mercer International is more favorable than Sugarmade.

Volatility and Risk

Mercer International has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Sugarmade has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Profitability

This table compares Mercer International and Sugarmade’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercer International	-5.60%	-23.69%	-4.62%
Sugarmade	N/A	N/A	N/A

Valuation & Earnings

This table compares Mercer International and Sugarmade”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercer International	$2.04 billion	0.10	-$85.14 million	($1.35)	-2.24
Sugarmade	$2.40 million	0.00	-$3.04 million	N/A	N/A

Sugarmade has lower revenue, but higher earnings than Mercer International.

About Mercer International

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) and northern bleached hardwood kraft (NBHK) pulp worldwide. The company operates through two segments, Pulp and Solid Wood. It manufactures, sells, and distributes pulp, electricity, and chemicals through pulp mills. The company also manufactures, distributes, and sells lumber, cross-laminated timber, finger joint lumber, glue-laminated timber, wood pallets, electricity, biofuels, and wood residuals. In addition, it generates and sells green energy produced from biomass cogeneration power plant to third party. Further, it produces and sells NBSK pulp manufactured from softwood; green energy using carbon-neutral biofuels, such as black liquor and wood waste; tall oil from black liquor for use as a chemical additive and green energy source; bio extractives and biomaterials, including lignin, turpentine, cellulose filaments, and sandalwood oil; and biofuels; as well as provides transportation and logistics services. The company sells its pulp to pulp markets, integrated paper and paperboard manufacturers; and lumber products to distributors, construction firms, secondary manufacturers, retail yards, and home centers. Mercer International Inc. was founded in 1968 and is headquartered in Vancouver, Canada.

About Sugarmade

Sugarmade, Inc. engages in the paper and paper-based products business in the United States. It operates through three segments: Paper and Paper-Based Products, Non-Medical Supplies, and Cannabis Products Delivery Service and Sales. The company also produces and wholesales custom printed and generic supplies, such as plastic cold cups, paper coffee cups, yogurt cups, ice cream cups, cup lids, cup sleeves, edible packaging, food containers, soup containers, plastic spoons, and other related products to quick-service restaurants. In addition, it offers non-medical personal protective equipment. Further, the company operates the cannabis products delivery and sale services under the BudCars, Lemon Glow, and Nug Avenue brand names. It also offers its products through CarryOutSupplies.com website. Sugarmade, Inc. was founded in 2009 and is based in Monrovia, California.