MeadWestvaco Corp. (NYSE: MWV) and International Paper (NYSE:IP) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitabiliy, valuation, earnings, risk and dividends.

Profitability

This table compares MeadWestvaco Corp. and International Paper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MeadWestvaco Corp. 2.42% 3.90% 1.34%
International Paper 3.73% 27.09% 3.61%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MeadWestvaco Corp. N/A N/A N/A N/A N/A
International Paper $21.93 billion 0.98 $3.22 billion $1.97 26.50

International Paper has higher revenue and earnings than MeadWestvaco Corp..

Dividends

International Paper pays an annual dividend of $1.85 per share and has a dividend yield of 3.5%. MeadWestvaco Corp. does not pay a dividend. International Paper pays out 93.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. International Paper has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for MeadWestvaco Corp. and International Paper, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MeadWestvaco Corp. 0 0 0 0 N/A
International Paper 2 5 5 0 2.25

International Paper has a consensus price target of $58.44, indicating a potential upside of 11.94%. Given International Paper’s higher probable upside, analysts clearly believe International Paper is more favorable than MeadWestvaco Corp..

Insider & Institutional Ownership

83.0% of International Paper shares are owned by institutional investors. 0.6% of International Paper shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

International Paper beats MeadWestvaco Corp. on 10 of the 11 factors compared between the two stocks.

MeadWestvaco Corp. Company Profile

MeadWestvaco Corporation (MWV) is a global packaging company. The company’s segments include Food & Beverage, Home, Health & Beauty, Industrial, Specialty Chemicals, and Community Development and Land Management. The Food & Beverage segment produces packaging materials, and designs and produces packaging solutions for the food, food service, beverage, dairy, tobacco end markets and paperboard for commercial printing. The Home, Health & Beauty segment offers packaging solutions for the personal care, fragrance, home care, lawn and garden, prescription drug and healthcare end markets. The Industrial segment designs and produces corrugated packaging solutions, for produce, meat, consumer products and bulk goods. The Specialty Chemicals segment manufactures, markets and distributes specialty chemicals. The Community Development and Land Management segment is responsible for maximizing the value of its 94,000 development acres in the Charleston, South Carolina region.

International Paper 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.

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