Glatfelter (NYSE: GLT) and Neenah Paper (NYSE:NP) are both small-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.

Dividends

Glatfelter pays an annual dividend of $0.52 per share and has a dividend yield of 2.7%. Neenah Paper pays an annual dividend of $1.48 per share and has a dividend yield of 1.9%. Glatfelter pays out 140.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Neenah Paper pays out 35.9% of its earnings in the form of a dividend. Glatfelter has raised its dividend for 4 consecutive years and Neenah Paper has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Glatfelter and Neenah Paper, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Glatfelter 0 1 1 0 2.50
Neenah Paper 0 1 0 0 2.00

Glatfelter presently has a consensus price target of $24.50, suggesting a potential upside of 27.27%. Neenah Paper has a consensus price target of $78.00, suggesting a potential upside of 0.13%. Given Glatfelter’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Glatfelter is more favorable than Neenah Paper.

Risk and Volatility

Glatfelter has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Neenah Paper has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Profitability

This table compares Glatfelter and Neenah Paper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Glatfelter 1.06% 9.15% 3.99%
Neenah Paper 7.51% 21.77% 9.71%

Valuation and Earnings

This table compares Glatfelter and Neenah Paper’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Glatfelter $1.60 billion 0.52 $88.36 million $0.37 52.03
Neenah Paper $941.50 million 1.39 $148.10 million $4.12 18.91

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

Insider and Institutional Ownership

90.1% of Glatfelter shares are owned by institutional investors. Comparatively, 89.3% of Neenah Paper shares are owned by institutional investors. 2.3% of Glatfelter shares are owned by company insiders. Comparatively, 2.0% of Neenah Paper shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Neenah Paper beats Glatfelter on 9 of the 17 factors compared between the two stocks.

Glatfelter Company Profile

P. H. Glatfelter Company is a manufacturer of specialty papers and fiber-based engineered materials. The Company operates through three business units: Composite Fibers, Advanced Airlaid Materials and Specialty Papers. Its Composite Fibers business unit is engaged in the sale of single-serve tea and coffee filtration papers, non-woven wallcovering materials, metallized papers, composite laminates papers, and various technically special papers, including substrates for electrical applications. Its Advanced Airlaid Materials is engaged in the sale of airlaid non-woven fabric-like materials used in feminine hygiene and adult incontinence products, wipes and other airlaid applications. Its Specialty Papers business unit is engaged in the sale of papers for carbonless and other forms, envelopes, book publishing and engineered products, such as papers for high-speed ink jet printing, office specialty products, greeting cards, postal and other specialty applications.

Neenah Paper Company Profile

Neenah Paper, Inc. is a producer of technical products and premium fine papers and packaging. The Company has two primary businesses: technical products business, and fine paper and packaging business. Its segments consist of Technical Products, Fine Paper and Packaging, and Other. The technical products business is an international producer of transportation, water and other filter media and durable, saturated and coated substrates. The fine paper and packaging business is a supplier of printing and other specialty papers in North America. Its technical products manufacturing facilities are located near Munich, Germany, in Bolton, England, in Munising, Michigan and in Pittsfield, Massachusetts. In addition, certain technical products are manufactured along with fine paper and packaging products in shared facilities located in upstate New York and Quakertown, Pennsylvania. JET-PRO SofStretch, KIMDURA, GESSNER, PREVAIL, NEENAH and GESSNER are brands of its technical products business.

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