Head to Head Survey: Mercer International (NASDAQ:MERC) & Smurfit Westrock (NYSE:SW)

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

Analyst Recommendations

This is a summary of recent recommendations for Smurfit Westrock and Mercer International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smurfit Westrock	0	1	10	1	3.00
Mercer International	1	4	0	0	1.80

Smurfit Westrock presently has a consensus target price of $57.80, indicating a potential upside of 33.27%. Mercer International has a consensus target price of $4.25, indicating a potential upside of 49.12%. Given Mercer International’s higher possible upside, analysts clearly believe Mercer International is more favorable than Smurfit Westrock.

Dividends

Smurfit Westrock pays an annual dividend of $1.72 per share and has a dividend yield of 4.0%. Mercer International pays an annual dividend of $0.30 per share and has a dividend yield of 10.5%. 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. Mercer International pays out -18.4% of its earnings in the form of a dividend. Mercer International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

83.4% of Smurfit Westrock shares are held by institutional investors. Comparatively, 85.8% of Mercer International shares are held by institutional investors. 0.5% of Smurfit Westrock shares are held by insiders. Comparatively, 1.0% of Mercer International 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.

Risk & Volatility

Smurfit Westrock has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Mercer International has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares Smurfit Westrock and Mercer International’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%
Mercer International	-5.60%	-23.88%	-4.61%

Earnings & Valuation

This table compares Smurfit Westrock and Mercer International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smurfit Westrock	$21.11 billion	1.07	$319.00 million	$0.66	65.71
Mercer International	$2.04 billion	0.09	-$85.14 million	($1.63)	-1.75

Smurfit Westrock has higher revenue and earnings than Mercer International. Mercer International 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 Mercer International on 12 of the 17 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 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.