Reviewing Stora Enso Oyj (OTCMKTS:SEOAY) and International Paper (NYSE:IP)

Stora Enso Oyj (OTCMKTS:SEOAY) and International Paper (NYSE:IP) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Dividends

Stora Enso Oyj pays an annual dividend of $0.12 per share and has a dividend yield of 1.0%. International Paper pays an annual dividend of $1.85 per share and has a dividend yield of 3.9%. Stora Enso Oyj pays out -75.0% of its earnings in the form of a dividend. International Paper pays out -1,850.0% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

0.0% of Stora Enso Oyj shares are held by institutional investors. Comparatively, 82.0% of International Paper shares are held by institutional investors. 8.1% of Stora Enso Oyj shares are held by company insiders. Comparatively, 0.4% of International Paper shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Stora Enso Oyj and International Paper”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stora Enso Oyj	$9.79 billion	0.94	-$146.08 million	($0.16)	-73.25
International Paper	$18.62 billion	1.35	$557.00 million	($0.10)	-475.40

International Paper has higher revenue and earnings than Stora Enso Oyj. International Paper is trading at a lower price-to-earnings ratio than Stora Enso Oyj, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Stora Enso Oyj and International Paper, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stora Enso Oyj	2	0	0	0	1.00
International Paper	2	2	5	0	2.33

International Paper has a consensus target price of $55.0250, indicating a potential upside of 15.74%. Given International Paper’s stronger consensus rating and higher probable upside, analysts clearly believe International Paper is more favorable than Stora Enso Oyj.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Stora Enso Oyj	-1.18%	-3.89%	-1.99%
International Paper	-0.12%	2.63%	1.09%

Volatility & Risk

Stora Enso Oyj has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, International Paper has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Summary

International Paper beats Stora Enso Oyj on 14 of the 16 factors compared between the two stocks.

About Stora Enso Oyj

Stora Enso Oyj provides renewable solutions for the packaging, biomaterials, wooden constructions, and paper industries in Finland and internationally. It operates through Packaging Materials, Packaging Solutions, Biomaterials, Wood Products, Forest, Paper, and Other segments. The company's Packaging Materials segment offers virgin and recycled fiber replace fossil-based materials with low-carbon, renewable and recyclable packaging materials for food and beverage, pharmaceutical, and transport packaging. Its Packaging Solutions segment develops and sells fiber-based packaging products and services, including converting corrugated boards and carton boards; and new materials, such as formed fiber and wood foams into standard and bespoke packaging solutions for retail, e-commerce, and industrials. The company's Biomaterials segment provides various pulp for packaging, paper, tissue, specialties, and hygiene product producers; and tall oil and turpentine from biomass. Its Wood Products segment offers wood-based solutions, including digital tools for design and construction of building projects with wood; applications for windows and doors; and pellets for sustainable heating solutions. The company's Forest segment engages in sustainable forest management, as well as supplies wood. Its Paper segments offers portfolio of products for print and office use. The company's Other segment produces electricity and heat. It serves packaging manufacturers, brand owners, paper merchants, publishers, retailers, printing houses, converters, and construction companies. The company was incorporated in 1996 and is headquartered in Helsinki, Finland.

About International Paper

International Paper Company produces and sells renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. It operates through two segments, Industrial Packaging and Global Cellulose Fibers. The company offers linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft; and pulp for a range of applications, such as diapers, towel and tissue products, feminine care, incontinence, and other personal care products, as well as specialty pulps for use in textiles, construction materials, paints, coatings, and others. It sells its products directly to end users and converters, as well as through agents, resellers, and distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.