Contrasting Sappi (OTCMKTS:SPPJY) and Suzano (NYSE:SUZ)

Sappi (OTCMKTS:SPPJY) and Suzano (NYSE:SUZ) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Insider & Institutional Ownership

2.6% of Suzano shares are owned by institutional investors. 0.7% of Sappi shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sappi	$5.46 billion	0.17	$33.00 million	$0.17	9.85
Suzano	$8.79 billion	1.48	-$1.31 billion	$1.13	8.68

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sappi	1.75%	6.09%	2.56%
Suzano	15.54%	20.08%	4.93%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sappi and Suzano, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sappi	1	0	0	0	1.00
Suzano	0	0	1	2	3.67

Risk and Volatility

Sappi has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Suzano has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

Sappi pays an annual dividend of $0.10 per share and has a dividend yield of 6.0%. Suzano pays an annual dividend of $0.26 per share and has a dividend yield of 2.7%. Sappi pays out 58.8% of its earnings in the form of a dividend. Suzano pays out 23.0% 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.

Summary

Suzano beats Sappi on 12 of the 16 factors compared between the two stocks.

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.

About Suzano

Suzano S.A. produces and sells eucalyptus pulp and paper products in Brazil and internationally. It operates through Pulp and Paper segments. The company offers coated and uncoated printing and writing papers, paperboards, tissue papers, and market and fluff pulps; and lignin. It also engages in the research, development, and production of biofuel; operation of port terminals; power generation and distribution business; commercialization of equipment and parts; industrialization, commercialization, and exporting of pulp and standing wood; road freight transport; biotechnology research and development; and commercialization of paper and computer materials. In addition, the company is involved in the business office, production packaging, and financial fundraising activities; research, development, production, commercialization, and distribution of wood-based textile fibers, yarns, and filaments produced from cellulose and microfibrillated cellulose; and research and development of wood raw materials for the textile industry. Suzano S.A. was formerly known as Suzano Papel e Celulose S.A. and changed its name to Suzano S.A. in April 2019. The company was founded in 1924 and is headquartered in Salvador, Brazil.