Analyzing Domtar (UFS) & Boise (BZ)
Domtar (NYSE: UFS) and Boise (NYSE:BZ) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.
This table compares Domtar and Boise’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for Domtar and Boise, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Domtar currently has a consensus price target of $42.44, indicating a potential downside of 11.98%.
Domtar pays an annual dividend of $1.66 per share and has a dividend yield of 3.4%. Boise does not pay a dividend. Domtar pays out 59.5% of its earnings in the form of a dividend. Domtar has raised its dividend for 7 consecutive years.
Earnings & Valuation
This table compares Domtar and Boise’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Domtar||$5.10 billion||0.59||$128.00 million||$2.79||17.28|
Domtar has higher revenue and earnings than Boise. Boise is trading at a lower price-to-earnings ratio than Domtar, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
91.4% of Domtar shares are owned by institutional investors. 1.0% of Domtar shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Domtar beats Boise on 10 of the 11 factors compared between the two stocks.
Domtar Corporation designs, manufactures, markets and distributes a range of fiber-based products, including communication papers, specialty and packaging papers and absorbent hygiene products. The Company segments include Pulp and Paper and Personal Care. The Pulp and Paper segment consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp. The Personal Care segment consists of the design, manufacturing, marketing and distribution of absorbent hygiene products. The Company is a marketer of uncoated freesheet paper in North America serving a range of customers, including merchants, retail outlets, stationers, printers, publishers, converters and end users. It is also a marketer and producer of a line of incontinence care products, as well as infant diapers. It has a network of wood fiber converting assets that produce paper grade, fluff and specialty pulp.
Boise Inc. is a manufacturer of packaging and paper products, including corrugated containers and sheets, containerboard, protective packaging products, imaging papers for the office and home, printing and converting papers, label and release papers, newsprint and market pulp. The Company operates in the United States, Europe, Mexico, and Canada. The Company operates in three segments: Packaging, Paper, and Corporate and Other. The Company’s newsprint is sold primarily to newspaper publishers in the southern and southwestern the United States. During the year ended December 31, 2012, approximately 38% of the Company’s uncoated freesheet paper was sold to OfficeMax Incorporated, its customer. In October 2013, Packaging Corporation of America acquired Boise Inc.
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