Louisiana-Pacific (NYSE:LPX) and Rayonier (NYSE:RYN) Critical Survey

Louisiana-Pacific (NYSE:LPX) and Rayonier (NYSE:RYN) are both mid-cap construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Profitability

This table compares Louisiana-Pacific and Rayonier’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Louisiana-Pacific	10.34%	18.67%	12.19%
Rayonier	68.53%	3.39%	1.91%

Dividends

Louisiana-Pacific pays an annual dividend of $1.12 per share and has a dividend yield of 1.2%. Rayonier pays an annual dividend of $1.09 per share and has a dividend yield of 4.1%. Louisiana-Pacific pays out 26.4% of its earnings in the form of a dividend. Rayonier pays out 22.0% 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. Louisiana-Pacific has increased its dividend for 7 consecutive years. Rayonier is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Louisiana-Pacific has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500. Comparatively, Rayonier has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Louisiana-Pacific and Rayonier, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Louisiana-Pacific	1	2	4	0	2.43
Rayonier	0	3	1	0	2.25

Louisiana-Pacific presently has a consensus price target of $110.57, suggesting a potential upside of 15.06%. Rayonier has a consensus price target of $28.00, suggesting a potential upside of 6.44%. Given Louisiana-Pacific’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Louisiana-Pacific is more favorable than Rayonier.

Institutional & Insider Ownership

94.7% of Louisiana-Pacific shares are owned by institutional investors. Comparatively, 89.1% of Rayonier shares are owned by institutional investors. 1.4% of Louisiana-Pacific shares are owned by insiders. Comparatively, 0.9% of Rayonier shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Louisiana-Pacific and Rayonier”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Louisiana-Pacific	$2.94 billion	2.28	$420.00 million	$4.24	22.66
Rayonier	$1.26 billion	3.21	$359.15 million	$4.95	5.31

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

Summary

Louisiana-Pacific beats Rayonier on 12 of the 17 factors compared between the two stocks.

About Louisiana-Pacific

Louisiana-Pacific Corporation, together with its subsidiaries, provides building solutions primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It operates through Siding, Oriented Strand Board, LP South America, and Other segments. The Siding segment offers LP SmartSide trim and siding products, LP SmartSide ExpertFinish trim and siding products, LP BuilderSeries lap siding products, and LP Outdoor Building Solutions; and engineered wood siding, trim, soffit, and fascia products. Its Oriented Strand Board segment manufactures and distributes oriented strand board structural panel products comprising LP TechShield radiant barriers, LP WeatherLogic air and water barriers, LP Legacy premium sub-flooring products, LP NovaCore, LP FlameBlock fire-rated sheathing products, and LP TopNotch sub-flooring products. The LP South America segment manufactures and distributes oriented strand board structural panel and siding products. This segment distributes and sells related products for the region's transition to wood frame construction. It offers timber and timberlands and other products and services. sells its products primarily to retailers, wholesalers, and homebuilding and industrial businesses in North America and South America, Asia, Australia, and Europe. The company was incorporated in 1972 and is headquartered in Nashville, Tennessee.

About Rayonier

Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. As of December 31, 2023, Rayonier owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S. South (1.85 million acres), U.S. Pacific Northwest (418,000 acres) and New Zealand (421,000 acres).