Financial Comparison: Sylvamo (NYSE:SLVM) versus Rayonier Advanced Materials (NYSE:RYAM)

Rayonier Advanced Materials (NYSE:RYAM) and Sylvamo (NYSE:SLVM) are both small-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Rayonier Advanced Materials and Sylvamo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rayonier Advanced Materials	1	1	1	0	2.00
Sylvamo	1	2	1	0	2.00

Rayonier Advanced Materials presently has a consensus target price of $6.00, suggesting a potential downside of 7.98%. Sylvamo has a consensus target price of $54.00, suggesting a potential upside of 12.58%. Given Sylvamo’s higher possible upside, analysts plainly believe Sylvamo is more favorable than Rayonier Advanced Materials.

Profitability

This table compares Rayonier Advanced Materials and Sylvamo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rayonier Advanced Materials	-28.21%	-13.64%	-3.64%
Sylvamo	5.25%	19.72%	6.87%

Earnings & Valuation

This table compares Rayonier Advanced Materials and Sylvamo”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rayonier Advanced Materials	$1.63 billion	0.27	-$38.71 million	($6.25)	-1.04
Sylvamo	$3.77 billion	0.50	$302.00 million	$4.37	10.98

Sylvamo has higher revenue and earnings than Rayonier Advanced Materials. Rayonier Advanced Materials is trading at a lower price-to-earnings ratio than Sylvamo, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

68.6% of Rayonier Advanced Materials shares are owned by institutional investors. Comparatively, 91.2% of Sylvamo shares are owned by institutional investors. 4.4% of Rayonier Advanced Materials shares are owned by insiders. Comparatively, 0.7% of Sylvamo shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Rayonier Advanced Materials has a beta of 2.67, indicating that its share price is 167% more volatile than the S&P 500. Comparatively, Sylvamo has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Summary

Sylvamo beats Rayonier Advanced Materials on 10 of the 12 factors compared between the two stocks.

About Rayonier Advanced Materials

Rayonier Advanced Materials Inc. manufactures and sells cellulose specialty products in the United States, China, Latin America, Canada, Japan, Europe, Latin America, other Asian countries, and internationally. It operates through High Purity Cellulose, Paperboard, and High-Yield Pulp segments. The company’s products include cellulose specialties, which are natural polymers that are used as raw materials to manufacture a range of consumer-oriented products, such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon yarn for tires and industrial hoses, food casings, paints, and lacquers. It also offers commodity products, such as commodity viscose pulp used in woven applications, including rayon textiles for clothing and other fabrics, as well as in non-woven applications comprising baby wipes, cosmetic and personal wipes, industrial wipes, and mattress ticking; and absorbent materials consisting of fluff fibers that are used as an absorbent medium in disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes, and non-woven fabrics. In addition, the company provides paperboards for packaging, printing documents, brochures, promotional materials, paperback books and catalog covers, file folders, tags, and lottery tickets; and high-yield pulps to produces hardwood aspen, maple, and birch species for paperboard, packaging, printing and writing papers, and various other paper products. The company was founded in 1926 and is headquartered in Jacksonville, Florida.

About Sylvamo

Sylvamo Corporation produces and markets uncoated freesheet for cutsize, offset paper, and pulp in Latin America, Europe, and North America. The company operates through Europe, Latin America, and North America segments. The Europe segment offers copy, tinted, and colored laser printing paper under REY Adagio and Pro-Design brands; and graphic and high-speed inkjet printing papers under the brand Jetstar; as well as produces uncoated freesheet papers. The Latin America segment focuses on uncoated freesheet paper under Chamex, Chamequinho and Chambril brands, as well as produces HP papers. This segment also operates integrated mills and non-integrated mills. The North America segment offers imaging, commercial printing, and converting papers, as well as uncoated papers under Hammermill, Springhill, Williamsburg, Accent, DRM and Postmark brand names. It distributes its products through a variety of channels, including retail merchants, e-commerce, agents, resellers, and paper distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.