Louisiana-Pacific (NYSE:LPX – Get Free Report) and Sappi (OTCMKTS:SPPJY – Get Free Report) are both materials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.
Institutional and Insider Ownership
94.7% of Louisiana-Pacific shares are owned by institutional investors. 0.7% of Louisiana-Pacific shares are owned by insiders. Comparatively, 0.7% of Sappi shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Louisiana-Pacific and Sappi, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Louisiana-Pacific | 1 | 2 | 12 | 0 | 2.73 |
| Sappi | 0 | 1 | 0 | 0 | 2.00 |
Profitability
This table compares Louisiana-Pacific and Sappi’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Louisiana-Pacific | 2.19% | 4.67% | 3.10% |
| Sappi | -15.44% | -6.41% | -2.30% |
Earnings & Valuation
This table compares Louisiana-Pacific and Sappi”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Louisiana-Pacific | $2.71 billion | 1.69 | $146.00 million | $0.79 | 83.09 |
| Sappi | $5.42 billion | 0.09 | -$177.00 million | ($1.36) | -0.61 |
Louisiana-Pacific has higher earnings, but lower revenue than Sappi. Sappi is trading at a lower price-to-earnings ratio than Louisiana-Pacific, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Louisiana-Pacific has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, Sappi has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.
Summary
Louisiana-Pacific beats Sappi on 12 of the 14 factors compared between the two stocks.
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.
About Sappi
Sappi Limited, together with its subsidiaries, engages in the provision of materials made from woodfiber-based renewable resources in Europe, North America, and South Africa. The company manufacture and sells dissolving pulp, and wood and paper pulp; graphic papers, coated and uncoated papers, and casting and release papers; and packaging and specialty papers, including packaging and specialty papers, including flexible packaging papers, label papers, functional paper packaging products, containerboards, paperboards, silicone base papers, and dye sublimation papers. It also provides biomaterials, such as valida, lignin, furfural, and sweeteners, as well as forestry products; and engages in the treasury and insurance business. The company was founded in 1936 and is headquartered in Johannesburg, South Africa.
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