Western Forest Products (OTCMKTS:WFSTF) & Clearwater Paper (NYSE:CLW) Critical Analysis

Clearwater Paper (NYSE:CLW) and Western Forest Products (OTCMKTS:WFSTF) are both materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

90.0% of Clearwater Paper shares are owned by institutional investors. Comparatively, 75.3% of Western Forest Products shares are owned by institutional investors. 2.4% of Clearwater Paper shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Clearwater Paper and Western Forest Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clearwater Paper	-3.24%	-7.95%	-4.06%
Western Forest Products	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations and price targets for Clearwater Paper and Western Forest Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clearwater Paper	1	5	2	0	2.12
Western Forest Products	0	4	0	0	2.00

Clearwater Paper presently has a consensus target price of $18.50, suggesting a potential downside of 13.57%. Given Clearwater Paper’s stronger consensus rating and higher probable upside, research analysts clearly believe Clearwater Paper is more favorable than Western Forest Products.

Valuation & Earnings

This table compares Clearwater Paper and Western Forest Products”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clearwater Paper	$1.56 billion	0.22	-$18.60 million	($3.04)	-7.04
Western Forest Products	N/A	N/A	N/A	$0.26	51.32

Western Forest Products has lower revenue, but higher earnings than Clearwater Paper. Clearwater Paper is trading at a lower price-to-earnings ratio than Western Forest Products, indicating that it is currently the more affordable of the two stocks.

Summary

Clearwater Paper beats Western Forest Products on 6 of the 11 factors compared between the two stocks.

About Clearwater Paper

Clearwater Paper Corporation manufactures and supplies bleached paperboards, and consumer and parent roll tissues in the United States and internationally. It operates through Pulp and Paperboard, and Consumer Products segments. The Pulp and Paperboard segment manufactures and markets bleached paperboard; Solid Bleached Sulfate paperboard that is used to produce folding cartons, liquid packaging, cups and plates, blister and carded packaging, and top sheet and commercial printing items; and hardwood and softwood pulp, as well as offers services that include custom sheeting, slitting, and cutting. It sells its products to carton converters, folding carton converters, merchants, and commercial printers. The Consumer Products segment provides a line of at-home tissue products, including bath tissues, paper towels, facial tissues, and napkins; recycled fiber value grade products; and away-from-home tissues. This segment sells its products to retailers, including grocery, club, mass merchants, and discount stores. The company was incorporated in 2005 and is based in Spokane, Washington.

About Western Forest Products

Western Forest Products Inc. operates as an integrated softwoods forest products company in Canada, the United States, Japan, China, Europe, and internationally. It is involved in timber harvesting, sawmilling logs into specialty lumber, value-added lumber and glulam remanufacturing, and wholesaling purchased lumber. The company also provides door and window; outdoor structure; and fencing products. Its products have applications in outdoor living, exterior appearance, interior living, industrial, and structural applications. Western Forest Products Inc. was founded in 1955 and is headquartered in Vancouver, Canada.