International Paper Company (IP) versus KapStone Paper and Packaging Corporation (NYSE:KS) Critical Survey
International Paper Company (NYSE: IP) and KapStone Paper and Packaging Corporation (NYSE:KS) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitabiliy, institutional ownership and valuation.
This table compares International Paper Company and KapStone Paper and Packaging Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|International Paper Company||3.63%||30.44%||4.01%|
|KapStone Paper and Packaging Corporation||2.45%||11.18%||3.06%|
Valuation and Earnings
This table compares International Paper Company and KapStone Paper and Packaging Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|International Paper Company||$21.48 billion||1.08||$2.85 billion||$1.88||29.98|
|KapStone Paper and Packaging Corporation||$3.10 billion||0.65||$349.68 million||$0.78||26.87|
International Paper Company has higher revenue and earnings than KapStone Paper and Packaging Corporation. KapStone Paper and Packaging Corporation is trading at a lower price-to-earnings ratio than International Paper Company, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
84.4% of International Paper Company shares are held by institutional investors. Comparatively, 83.3% of KapStone Paper and Packaging Corporation shares are held by institutional investors. 0.6% of International Paper Company shares are held by company insiders. Comparatively, 13.3% of KapStone Paper and Packaging Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a breakdown of current ratings and target prices for International Paper Company and KapStone Paper and Packaging Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|International Paper Company||2||7||3||0||2.08|
|KapStone Paper and Packaging Corporation||0||6||5||0||2.45|
International Paper Company presently has a consensus target price of $55.50, indicating a potential downside of 1.54%. KapStone Paper and Packaging Corporation has a consensus target price of $26.60, indicating a potential upside of 26.91%. Given KapStone Paper and Packaging Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe KapStone Paper and Packaging Corporation is more favorable than International Paper Company.
Volatility & Risk
International Paper Company has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, KapStone Paper and Packaging Corporation has a beta of 2.83, indicating that its share price is 183% more volatile than the S&P 500.
International Paper Company pays an annual dividend of $1.85 per share and has a dividend yield of 3.3%. KapStone Paper and Packaging Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. International Paper Company pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KapStone Paper and Packaging Corporation pays out 51.3% of its earnings in the form of a dividend. KapStone Paper and Packaging Corporation has increased its dividend for 5 consecutive years.
International Paper Company beats KapStone Paper and Packaging Corporation on 10 of the 17 factors compared between the two stocks.
International Paper Company Company Profile
International Paper Company is a paper and packaging company with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia, Africa and the Middle East. The Company’s segments include Industrial Packaging, Global Cellulose Fibers, Printing Papers and Consumer Packaging. The Company is a manufacturer of containerboard in the United States. Its products include linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft. The Company’s cellulose fibers product portfolio includes fluff, market and specialty pulps. The Company is a producer of printing and writing papers. The products in Printing Papers segment include uncoated papers. The Company is a producer of solid bleached sulfate board. As of December 31, 2016, the Company operated 29 pulp, paper and packaging mills, 170 converting and packaging plants, 16 recycling plants and three bag facilities in the United States.
KapStone Paper and Packaging Corporation Company Profile
KapStone Paper and Packaging Corporation is a producer of containerboard and the kraft paper in North America. The Company operates through two segments: Paper and Packaging, and Distribution. The Paper and Packaging segment manufactures and sells a range of containerboard, corrugated products and specialty paper for industrial and consumer markets. The Distribution segment, which operates under the Victory and Golden State Container trade names, provides its customers packaging solutions and services and distributes corrugated packaging materials and other specialty packaging products, which include stretch film, void fill, carton sealing tape and other specialty tapes. The Company produces a range of products ranging from basic corrugated shipping containers to specialized packaging. The Company also produces packaging for fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.
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