Analyzing Smurfit Westrock (NYSE:SW) & Sappi (OTCMKTS:SPPJY)

Smurfit Westrock (NYSE:SW) and Sappi (OTCMKTS:SPPJY) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Volatility and Risk

Smurfit Westrock has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Sappi has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Dividends

Smurfit Westrock pays an annual dividend of $1.72 per share and has a dividend yield of 4.0%. Sappi pays an annual dividend of $0.10 per share and has a dividend yield of 6.3%. Smurfit Westrock pays out 260.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sappi pays out 58.8% of its earnings in the form of a dividend. Sappi is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Smurfit Westrock and Sappi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smurfit Westrock	0	1	9	0	2.90
Sappi	1	0	0	0	1.00

Smurfit Westrock currently has a consensus price target of $58.00, indicating a potential upside of 35.90%. Given Smurfit Westrock’s stronger consensus rating and higher possible upside, equities analysts plainly believe Smurfit Westrock is more favorable than Sappi.

Profitability

This table compares Smurfit Westrock and Sappi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smurfit Westrock	1.14%	5.90%	2.36%
Sappi	1.75%	6.09%	2.56%

Institutional and Insider Ownership

83.4% of Smurfit Westrock shares are held by institutional investors. 0.5% of Smurfit Westrock shares are held by insiders. Comparatively, 0.7% of Sappi shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Smurfit Westrock and Sappi”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smurfit Westrock	$21.11 billion	1.06	$319.00 million	$0.66	64.67
Sappi	$5.46 billion	0.16	$33.00 million	$0.17	9.41

Smurfit Westrock has higher revenue and earnings than Sappi. Sappi is trading at a lower price-to-earnings ratio than Smurfit Westrock, indicating that it is currently the more affordable of the two stocks.

Summary

Smurfit Westrock beats Sappi on 10 of the 16 factors compared between the two stocks.

About Smurfit Westrock

Smurfit Westrock Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland and internationally. The company produces containerboard that it converts into corrugated containers or sells to third parties, as well as produces other types of paper, such as consumer packaging board, sack paper, graphic paper, solid board and graphic board, and other paper-based packaging products, such as consumer packaging, solid board packaging, paper sacks, and other packaging products, including bag-in-box. It also produces linerboard and corrugated medium, paperboard, and non-packaging grades of paper, as well as converted products, such as folding cartons and corrugated boxes, and other products; recycled paper-based packaging products; and packaging machinery. The company primarily serves food and beverage, e-commerce, retail, consumer goods, industrial, and foodservice markets. Smurfit Westrock Plc was founded in 1934 and is headquartered in Dublin, Ireland.

About Sappi

Sappi Limited, together with its subsidiaries, engages in the provision of materials made from woodfiber-based renewable resources in Europe, North America, and South Africa. The company manufacture and sells dissolving pulp, and wood and paper pulp; graphic papers, coated and uncoated papers, and casting and release papers; and packaging and specialty papers, including packaging and specialty papers, including flexible packaging papers, label papers, functional paper packaging products, containerboards, paperboards, silicone base papers, and dye sublimation papers. It also provides biomaterials, such as valida, lignin, furfural, and sweeteners, as well as forestry products; and engages in the treasury and insurance business. The company was founded in 1936 and is headquartered in Johannesburg, South Africa.