West Fraser Timber (NYSE:WFG – Get Free Report) and Stora Enso Oyj (OTCMKTS:SEOAY – Get Free Report) are both mid-cap materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.
Dividends
West Fraser Timber pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. Stora Enso Oyj pays an annual dividend of $0.15 per share and has a dividend yield of 1.3%. West Fraser Timber pays out -8.3% 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. West Fraser Timber has raised its dividend for 3 consecutive years. West Fraser Timber is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares West Fraser Timber and Stora Enso Oyj’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| West Fraser Timber | -22.98% | -10.84% | -8.19% |
| Stora Enso Oyj | 6.20% | 2.38% | 1.30% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| West Fraser Timber | $5.46 billion | 1.02 | -$937.00 million | ($15.44) | -4.61 |
| Stora Enso Oyj | $10.55 billion | 0.84 | $786.32 million | $0.84 | 13.31 |
Stora Enso Oyj has higher revenue and earnings than West Fraser Timber. West Fraser Timber 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.
Analyst Recommendations
This is a summary of recent ratings and price targets for West Fraser Timber and Stora Enso Oyj, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| West Fraser Timber | 1 | 3 | 4 | 0 | 2.38 |
| Stora Enso Oyj | 1 | 3 | 1 | 0 | 2.00 |
West Fraser Timber currently has a consensus price target of $83.20, indicating a potential upside of 16.97%. Stora Enso Oyj has a consensus price target of $10.80, indicating a potential downside of 3.43%. Given West Fraser Timber’s stronger consensus rating and higher possible upside, equities research analysts clearly believe West Fraser Timber is more favorable than Stora Enso Oyj.
Volatility and Risk
West Fraser Timber has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Stora Enso Oyj has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.
Insider & Institutional Ownership
40.2% of West Fraser Timber shares are owned by institutional investors. Comparatively, 0.0% of Stora Enso Oyj shares are owned by institutional investors. 1.8% of West Fraser Timber 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 hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
West Fraser Timber beats Stora Enso Oyj on 9 of the 17 factors compared between the two stocks.
About West Fraser Timber
West Fraser Timber Co. Ltd., a diversified wood products company, engages in manufacturing, selling, marketing, and distributing lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals and renewable energy. It offers spruce-pine-fir, douglas fir-larch, hem-fir, and southern yellow pine lumber, treated wood products, medium density fiberboard panels and plywood, oriented strand board, and laminated veneer lumber wood products, as well as particleboards. The company also provides northern bleached softwood Kraft pulp and bleached chemical thermo-mechanical pulp used to produce various paper products, including printing and writing papers, paperboard products, tissue and towel products, and a variety of other paper grades. Further, it offers bioproducts, including bioenergy and biomaterial. Its products are used in home construction, repair and remodeling, papers, tissue, and box materials, and industrial applications. The company sells its products to major retail chains, contractor supply yards, and wholesalers, as well as industrial customers for further processing or as components for other products in Canada, the United States, the United Kingdom, Europe, and internationally. West Fraser Timber Co. Ltd. was founded in 1955 and is headquartered in Vancouver, Canada.
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.
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