Stora Enso Oyj (OTCMKTS:SEOAY) & UPM-Kymmene (OTCMKTS:UPMKY) Critical Comparison

UPM-Kymmene (OTCMKTS:UPMKY) and Stora Enso Oyj (OTCMKTS:SEOAY) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Profitability

This table compares UPM-Kymmene and Stora Enso Oyj’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UPM-Kymmene	13.76%	12.57%	8.65%
Stora Enso Oyj	6.20%	2.38%	1.30%

Dividends

UPM-Kymmene pays an annual dividend of $1.21 per share and has a dividend yield of 4.6%. Stora Enso Oyj pays an annual dividend of $0.15 per share and has a dividend yield of 1.3%. UPM-Kymmene pays out 45.7% of its earnings in the form of a dividend. Stora Enso Oyj pays out 17.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Institutional & Insider Ownership

0.6% of UPM-Kymmene shares are owned by institutional investors. Comparatively, 0.0% of Stora Enso Oyj shares are owned by institutional investors. 1.0% of UPM-Kymmene shares are owned by company insiders. Comparatively, 8.1% of Stora Enso Oyj shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

UPM-Kymmene has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Stora Enso Oyj has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for UPM-Kymmene and Stora Enso Oyj, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UPM-Kymmene	0	0	0	0	0.00
Stora Enso Oyj	1	2	1	0	2.00

Stora Enso Oyj has a consensus target price of $10.80, suggesting a potential downside of 6.47%. Given Stora Enso Oyj’s stronger consensus rating and higher possible upside, analysts clearly believe Stora Enso Oyj is more favorable than UPM-Kymmene.

Valuation and Earnings

This table compares UPM-Kymmene and Stora Enso Oyj”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UPM-Kymmene	$12.38 billion	1.14	$1.77 billion	$2.65	9.98
Stora Enso Oyj	$10.55 billion	0.86	$786.32 million	$0.84	13.75

UPM-Kymmene has higher revenue and earnings than Stora Enso Oyj. UPM-Kymmene is trading at a lower price-to-earnings ratio than Stora Enso Oyj, indicating that it is currently the more affordable of the two stocks.

Summary

UPM-Kymmene beats Stora Enso Oyj on 10 of the 16 factors compared between the two stocks.

About UPM-Kymmene

UPM-Kymmene Oyj operates in the forest-based bio industry. It operates through UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers, UPM Plywood, and Other operations segments. The company provides eucalyptus, birch, and softwood pulp grades for tissue, specialty and graphic papers, boards, and packaging; sawn timber for construction, packaging, distribution, joinery, and furniture industries; and wood-based renewable diesel and renewable naphtha for fuel distributors, transportation, and oil and petrochemicals industries. It is also involved in the generation of electricity through hydro, nuclear, and condensing power plants. In addition, the company offers self-adhesive papers and film label stocks for product and information labelling to label printers and brand owners in food, beverage, personal care, pharmaceutical, and retail segments; label papers and release liners, fine papers, and flexible packaging, as well as label and packaging papers production lines for retailers, printers, publishers, distributors, and paper converters; and graphic papers for advertising, magazines, newspapers, and home and office to publishers, cataloguers, retailers, printers, and merchants. Further, it provides plywood and veneer products for construction, vehicle flooring, liquefied natural gas shipbuilding, and other manufacturing industries; wood and wood-based biomass, and forestry services for woodland and forest owners; outdoor products for construction, and granulates for injection molding and extrusion; wood-based lignin products for industrial use and cell culture hydrogel products for biomedical applications; and biomedical products. The company primarily operates in Europe, North America, and Asia. UPM-Kymmene Oyj was founded in 1995 and is headquartered in Helsinki, Finland.

About Stora Enso Oyj

Stora Enso Oyj provides renewable solutions for the packaging, biomaterials, wooden constructions, and paper industries in Finland and internationally. It operates through Packaging Materials, Packaging Solutions, Biomaterials, Wood Products, Forest, Paper, and Other segments. The company's Packaging Materials segment offers virgin and recycled fiber replace fossil-based materials with low-carbon, renewable and recyclable packaging materials for food and beverage, pharmaceutical, and transport packaging. Its Packaging Solutions segment develops and sells fiber-based packaging products and services, including converting corrugated boards and carton boards; and new materials, such as formed fiber and wood foams into standard and bespoke packaging solutions for retail, e-commerce, and industrials. The company's Biomaterials segment provides various pulp for packaging, paper, tissue, specialties, and hygiene product producers; and tall oil and turpentine from biomass. Its Wood Products segment offers wood-based solutions, including digital tools for design and construction of building projects with wood; applications for windows and doors; and pellets for sustainable heating solutions. The company's Forest segment engages in sustainable forest management, as well as supplies wood. Its Paper segments offers portfolio of products for print and office use. The company's Other segment produces electricity and heat. It serves packaging manufacturers, brand owners, paper merchants, publishers, retailers, printing houses, converters, and construction companies. The company was incorporated in 1996 and is headquartered in Helsinki, Finland.