Critical Contrast: Nine Dragons Paper (OTCMKTS:NDGPF) vs. Louisiana-Pacific (NYSE:LPX)

Nine Dragons Paper (OTCMKTS:NDGPF) and Louisiana-Pacific (NYSE:LPX) are both materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Nine Dragons Paper and Louisiana-Pacific, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nine Dragons Paper	0	0	0	0	0.00
Louisiana-Pacific	1	1	11	0	2.77

Louisiana-Pacific has a consensus target price of $97.80, indicating a potential upside of 34.73%. Given Louisiana-Pacific’s stronger consensus rating and higher possible upside, analysts plainly believe Louisiana-Pacific is more favorable than Nine Dragons Paper.

Dividends

Nine Dragons Paper pays an annual dividend of $0.10 per share and has a dividend yield of 10.4%. Louisiana-Pacific pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. Nine Dragons Paper pays out 26.4% of its earnings in the form of a dividend. Louisiana-Pacific pays out 101.7% 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 has raised its dividend for 7 consecutive years. Nine Dragons Paper is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

13.8% of Nine Dragons Paper shares are owned by institutional investors. Comparatively, 94.7% of Louisiana-Pacific shares are owned by institutional investors. 0.7% of Louisiana-Pacific shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Nine Dragons Paper and Louisiana-Pacific”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nine Dragons Paper	N/A	N/A	N/A	$0.38	2.53
Louisiana-Pacific	$2.71 billion	1.87	$146.00 million	$1.18	61.51

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nine Dragons Paper	N/A	N/A	N/A
Louisiana-Pacific	3.20%	7.03%	4.64%

Summary

Louisiana-Pacific beats Nine Dragons Paper on 12 of the 14 factors compared between the two stocks.

About Nine Dragons Paper

Nine Dragons Paper (Holdings) Limited, together with its subsidiaries, engages in the production and sale of packaging paper, recycled printing and writing paper, and specialty paper and pulp products in the People's Republic of China. The company offers linerboard products, including kraft, test, white top, and coated linerboards; corrugating medium containerboard products; corrugated cardboard products; carton box products; corrugated sheet products; and coated duplex boards. It also provides recycled printing and writing paper, such as uncoated wood-free paper and office paper; capacitor tissue paper; low and high voltage, ultra-high-voltage transformer coil winding, and heat-resistant insulating paper; and recycled and kraft pulp products. It also operates in Vietnam, Malaysia, and the United States. The company was founded in 1995 and is headquartered in Dongguan, the People's Republic of China. Nine Dragons Paper (Holdings) Limited operates as a subsidiary of Best Result Holdings Limited.

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.