Contrasting Sylvamo (NYSE:SLVM) & Louisiana-Pacific (NYSE:LPX)

Sylvamo (NYSE:SLVM) and Louisiana-Pacific (NYSE:LPX) are both materials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sylvamo	2.31%	8.36%	2.90%
Louisiana-Pacific	2.19%	4.67%	3.10%

Risk & Volatility

Sylvamo has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Louisiana-Pacific has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Sylvamo and Louisiana-Pacific, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sylvamo	2	2	1	0	1.80
Louisiana-Pacific	2	1	11	0	2.64

Sylvamo presently has a consensus target price of $46.67, suggesting a potential upside of 30.98%. Louisiana-Pacific has a consensus target price of $94.00, suggesting a potential upside of 38.89%. Given Louisiana-Pacific’s stronger consensus rating and higher possible upside, analysts plainly believe Louisiana-Pacific is more favorable than Sylvamo.

Dividends

Sylvamo pays an annual dividend of $1.80 per share and has a dividend yield of 5.1%. Louisiana-Pacific pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. Sylvamo pays out 95.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Louisiana-Pacific pays out 151.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sylvamo has raised its dividend for 3 consecutive years and Louisiana-Pacific has raised its dividend for 7 consecutive years. Sylvamo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

91.2% of Sylvamo shares are owned by institutional investors. Comparatively, 94.7% of Louisiana-Pacific shares are owned by institutional investors. 0.8% of Sylvamo shares are owned by company insiders. Comparatively, 0.7% of Louisiana-Pacific shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Sylvamo and Louisiana-Pacific”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sylvamo	$3.35 billion	0.42	$132.00 million	$1.88	18.95
Louisiana-Pacific	$2.71 billion	1.75	$146.00 million	$0.79	85.67

Louisiana-Pacific has lower revenue, but higher earnings than Sylvamo. Sylvamo is trading at a lower price-to-earnings ratio than Louisiana-Pacific, indicating that it is currently the more affordable of the two stocks.

Summary

Louisiana-Pacific beats Sylvamo on 10 of the 17 factors compared between the two stocks.

About Sylvamo

Sylvamo Corporation produces and markets uncoated freesheet for cutsize, offset paper, and pulp in Latin America, Europe, and North America. The company operates through Europe, Latin America, and North America segments. The Europe segment offers copy, tinted, and colored laser printing paper under REY Adagio and Pro-Design brands; and graphic and high-speed inkjet printing papers under the brand Jetstar; as well as produces uncoated freesheet papers. The Latin America segment focuses on uncoated freesheet paper under Chamex, Chamequinho and Chambril brands, as well as produces HP papers. This segment also operates integrated mills and non-integrated mills. The North America segment offers imaging, commercial printing, and converting papers, as well as uncoated papers under Hammermill, Springhill, Williamsburg, Accent, DRM and Postmark brand names. It distributes its products through a variety of channels, including retail merchants, e-commerce, agents, resellers, and paper distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.

About Louisiana-Pacific

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.