Critical Analysis: Louisiana-Pacific (LPX) & Its Peers

Louisiana-Pacific (NYSE:LPX) is one of 15 public companies in the “BLDG PRD – WOOD” industry, but how does it compare to its rivals? We will compare Louisiana-Pacific to related businesses based on the strength of its analyst recommendations, valuation, profitability, dividends, institutional ownership, earnings and risk.

Dividends

Louisiana-Pacific pays an annual dividend of $1.12 per share and has a dividend yield of 1.3%. Louisiana-Pacific pays out 19.6% of its earnings in the form of a dividend. As a group, “BLDG PRD – WOOD” companies pay a dividend yield of 1.7% and pay out 37.6% of their earnings in the form of a dividend. Louisiana-Pacific has raised its dividend for 7 consecutive years.

Profitability

This table compares Louisiana-Pacific and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Louisiana-Pacific	13.74%	23.75%	15.50%
Louisiana-Pacific Competitors	7.65%	10.27%	6.04%

Institutional & Insider Ownership

94.7% of Louisiana-Pacific shares are held by institutional investors. Comparatively, 82.9% of shares of all “BLDG PRD – WOOD” companies are held by institutional investors. 1.4% of Louisiana-Pacific shares are held by company insiders. Comparatively, 4.4% of shares of all “BLDG PRD – WOOD” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Louisiana-Pacific and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Louisiana-Pacific	$2.94 billion	$420.00 million	15.35
Louisiana-Pacific Competitors	$4.92 billion	$297.37 million	-11.56

Louisiana-Pacific’s rivals have higher revenue, but lower earnings than Louisiana-Pacific. Louisiana-Pacific is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

Louisiana-Pacific has a beta of 1.89, suggesting that its share price is 89% more volatile than the S&P 500. Comparatively, Louisiana-Pacific’s rivals have a beta of 1.49, suggesting that their average share price is 49% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Louisiana-Pacific and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Louisiana-Pacific	2	2	4	0	2.25
Louisiana-Pacific Competitors	188	1156	1094	47	2.40

Louisiana-Pacific currently has a consensus price target of $106.63, suggesting a potential upside of 21.89%. As a group, “BLDG PRD – WOOD” companies have a potential upside of 26.47%. Given Louisiana-Pacific’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Louisiana-Pacific has less favorable growth aspects than its rivals.

Summary

Louisiana-Pacific beats its rivals on 9 of the 15 factors compared.

Louisiana-Pacific Company Profile

Louisiana-Pacific Corporation, together with its subsidiaries, provides building solutions primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It operates through Siding, Oriented Strand Board, LP South America, and Other segments. The Siding segment offers LP SmartSide trim and siding products, LP SmartSide ExpertFinish trim and siding products, LP BuilderSeries lap siding products, and LP Outdoor Building Solutions; and engineered wood siding, trim, soffit, and fascia products. Its Oriented Strand Board segment manufactures and distributes oriented strand board structural panel products comprising LP TechShield radiant barriers, LP WeatherLogic air and water barriers, LP Legacy premium sub-flooring products, LP NovaCore, LP FlameBlock fire-rated sheathing products, and LP TopNotch sub-flooring products. The LP South America segment manufactures and distributes oriented strand board structural panel and siding products. This segment distributes and sells related products for the region's transition to wood frame construction. It offers timber and timberlands and other products and services. sells its products primarily to retailers, wholesalers, and homebuilding and industrial businesses in North America and South America, Asia, Australia, and Europe. The company was incorporated in 1972 and is headquartered in Nashville, Tennessee.