Analyzing Magnera (NYSE:MAGN) and UPM-Kymmene (OTCMKTS:UPMKY)

UPM-Kymmene (OTCMKTS:UPMKY) and Magnera (NYSE:MAGN) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for UPM-Kymmene and Magnera, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UPM-Kymmene	0	0	0	0	0.00
Magnera	0	0	1	0	3.00

Magnera has a consensus price target of $24.00, indicating a potential upside of 25.07%. Given Magnera’s stronger consensus rating and higher possible upside, analysts clearly believe Magnera is more favorable than UPM-Kymmene.

Profitability

This table compares UPM-Kymmene and Magnera’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%
Magnera	-6.97%	-10.62%	-3.97%

Volatility & Risk

UPM-Kymmene has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Magnera has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500.

Earnings & Valuation

This table compares UPM-Kymmene and Magnera”s 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
Magnera	$1.31 billion	0.52	-$60.00 million	($18.34)	-1.05

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

Insider and Institutional Ownership

0.6% of UPM-Kymmene shares are owned by institutional investors. Comparatively, 76.9% of Magnera shares are owned by institutional investors. 1.0% of UPM-Kymmene shares are owned by company insiders. Comparatively, 2.3% of Magnera shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

UPM-Kymmene beats Magnera on 8 of the 14 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 Magnera

Magnera’s purpose is to better the world with new possibilities made real. By continuously co-creating and innovating with our partners, we develop original material solutions that make a brighter future possible. With a breadth of technologies and a passion for what we create, Magnera’s solutions propel our customers’ goals forward and solve end-users’ problems, every day.