Clearwater Paper (NYSE: CLW) and KapStone Paper and Packaging (NYSE:KS) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.
This table compares Clearwater Paper and KapStone Paper and Packaging’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|KapStone Paper and Packaging||7.34%||13.31%||3.89%|
This is a summary of recent ratings for Clearwater Paper and KapStone Paper and Packaging, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|KapStone Paper and Packaging||0||8||1||0||2.11|
Clearwater Paper currently has a consensus price target of $43.00, indicating a potential upside of 15.13%. KapStone Paper and Packaging has a consensus price target of $29.33, indicating a potential downside of 15.73%. Given Clearwater Paper’s stronger consensus rating and higher possible upside, research analysts plainly believe Clearwater Paper is more favorable than KapStone Paper and Packaging.
KapStone Paper and Packaging pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Clearwater Paper does not pay a dividend. KapStone Paper and Packaging pays out 16.3% of its earnings in the form of a dividend.
Risk & Volatility
Clearwater Paper has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, KapStone Paper and Packaging has a beta of 3.04, suggesting that its share price is 204% more volatile than the S&P 500.
Institutional and Insider Ownership
87.6% of Clearwater Paper shares are owned by institutional investors. Comparatively, 84.8% of KapStone Paper and Packaging shares are owned by institutional investors. 2.4% of Clearwater Paper shares are owned by insiders. Comparatively, 13.1% of KapStone Paper and Packaging shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Clearwater Paper and KapStone Paper and Packaging’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Clearwater Paper||$1.73 billion||0.36||$97.33 million||$5.86||6.37|
|KapStone Paper and Packaging||$3.32 billion||1.02||$243.50 million||$2.46||14.15|
KapStone Paper and Packaging has higher revenue and earnings than Clearwater Paper. Clearwater Paper is trading at a lower price-to-earnings ratio than KapStone Paper and Packaging, indicating that it is currently the more affordable of the two stocks.
KapStone Paper and Packaging beats Clearwater Paper on 10 of the 15 factors compared between the two stocks.
Clearwater Paper Company Profile
Clearwater Paper Corporation manufactures consumer tissue, away-from-home (AFH) tissue, parent roll tissue, bleached paperboard and pulp at manufacturing facilities across the nation. The Company operates through two segments: Consumer Products segment, and Pulp and Paperboard segment. The Company’s Consumer Products segment manufactures and sells a line of at-home tissue products, as well as AFH products. The Company’s Pulp and Paperboard segment manufactures and markets bleached paperboard for the packaging industry. It is a producer of solid bleach sulfate (SBS) paperboard. The Company is a supplier of private label tissue to a range of retailers and wholesale distributors, including grocery, drug, mass merchants and discount stores. In addition, the Company produces bleached paperboard used by printers and packaging converters, and offers services that include custom sheeting, slitting and cutting.
KapStone Paper and Packaging Company Profile
KapStone Paper and Packaging Corporation is a producer of containerboard and the kraft paper in North America. The Company operates through two segments: Paper and Packaging, and Distribution. The Paper and Packaging segment manufactures and sells a range of containerboard, corrugated products and specialty paper for industrial and consumer markets. The Distribution segment, which operates under the Victory and Golden State Container trade names, provides its customers packaging solutions and services and distributes corrugated packaging materials and other specialty packaging products, which include stretch film, void fill, carton sealing tape and other specialty tapes. The Company produces a range of products ranging from basic corrugated shipping containers to specialized packaging. The Company also produces packaging for fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.
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