International Paper (NYSE:IP) versus Rayonier Advanced Materials (NYSE:RYAM) Financial Analysis

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

Valuation and Earnings

This table compares Rayonier Advanced Materials and International Paper”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rayonier Advanced Materials	$1.63 billion	0.23	-$38.71 million	($6.25)	-0.91
International Paper	$18.62 billion	1.11	$557.00 million	($2.61)	-15.05

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

Institutional and Insider Ownership

68.6% of Rayonier Advanced Materials shares are owned by institutional investors. Comparatively, 82.0% of International Paper shares are owned by institutional investors. 4.4% of Rayonier Advanced Materials shares are owned by company insiders. Comparatively, 0.6% of International Paper shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Rayonier Advanced Materials and International Paper’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%
International Paper	-5.45%	-0.16%	-0.07%

Analyst Recommendations

This is a breakdown of current recommendations for Rayonier Advanced Materials and International Paper, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rayonier Advanced Materials	1	1	1	0	2.00
International Paper	2	3	10	0	2.53

Rayonier Advanced Materials presently has a consensus price target of $6.00, suggesting a potential upside of 5.17%. International Paper has a consensus price target of $49.23, suggesting a potential upside of 25.34%. Given International Paper’s stronger consensus rating and higher probable upside, analysts plainly believe International Paper is more favorable than Rayonier Advanced Materials.

Volatility & Risk

Rayonier Advanced Materials has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500. Comparatively, International Paper has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Summary

International Paper beats Rayonier Advanced Materials on 11 of the 14 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 International Paper

International Paper Company produces and sells renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. It operates through two segments, Industrial Packaging and Global Cellulose Fibers. The company offers linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft; and pulp for a range of applications, such as diapers, towel and tissue products, feminine care, incontinence, and other personal care products, as well as specialty pulps for use in textiles, construction materials, paints, coatings, and others. It sells its products directly to end users and converters, as well as through agents, resellers, and distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.