UPM (OTCMKTS: UPMKY) and Resolute Forest Products (NYSE:RFP) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Volatility and Risk

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UPM has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Resolute Forest Products has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for UPM and Resolute Forest Products, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UPM 0 0 0 0 N/A
Resolute Forest Products 1 3 1 0 2.00

Resolute Forest Products has a consensus target price of $9.81, indicating a potential downside of 4.73%. Given Resolute Forest Products’ higher probable upside, analysts plainly believe Resolute Forest Products is more favorable than UPM.

Valuation and Earnings

This table compares UPM and Resolute Forest Products’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UPM $10.68 billion 1.82 $972.70 million $1.80 20.21
Resolute Forest Products $3.51 billion 0.26 -$84.00 million N/A N/A

UPM has higher revenue and earnings than Resolute Forest Products.

Dividends

UPM pays an annual dividend of $0.98 per share and has a dividend yield of 2.7%. Resolute Forest Products does not pay a dividend. UPM pays out 54.4% of its earnings in the form of a dividend.

Profitability

This table compares UPM and Resolute Forest Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UPM 9.30% 11.63% 6.99%
Resolute Forest Products -2.39% 0.74% 0.28%

Institutional and Insider Ownership

0.2% of UPM shares are owned by institutional investors. Comparatively, 88.3% of Resolute Forest Products shares are owned by institutional investors. 1.0% of UPM shares are owned by insiders. Comparatively, 1.0% of Resolute Forest Products shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

UPM beats Resolute Forest Products on 7 of the 13 factors compared between the two stocks.

UPM Company Profile

UPM-Kymmene Oyj operates in the forest-based bio industry. It operates through UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA, UPM Plywood, and Other Operations divisions. The company provides eucalyptus, birch, and softwood pulp grades for tissue, specialty, graphic papers, and packaging; wood-based renewable diesel and naphtha for fuel distributors and transportation industries; and sawn timber for joinery, packaging, distribution, and construction industries. It is also involved in the generation of electricity through hydro, nuclear, and condensing power plants in the Finnish and Scandinavian electricity market. In addition, the company offers self-adhesive papers and film label stocks for product and information labelling in label printers and brand owners in food, personal care, pharmaceutical, and retail segment; label papers and release liners, and fine papers, 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, LNG shipbuilding, and other manufacturing industries; wood and forestry service for UPM mills and forest owners; and chemical building blocks, lignin products, biofibrils, and biomedical products, as well as outdoor products and composite material for construction, and granulates for injection molding and extrusion. The company was founded in 1995 and is headquartered in Helsinki, Finland.

Resolute Forest Products Company Profile

Resolute Forest Products Inc. operates in the forest products industry in the United States, Canada, Mexico, and internationally. The company operates in five segments: Market Pulp, Tissue, Wood Products, Newsprint, and Specialty Papers. The Market Pulp segment offers market, recycled bleached Kraft, and bleached hardwood Kraft pulp used to make a range of consumer products, including tissue, packaging, specialty paper products, diapers, and other absorbent products. The Tissue segment provides tissue products, such as recycled and virgin paper products for the away-from-home and at-home markets; and sells roll products. The Wood Products segment produces construction-grade and spruce-pine-fir lumber products, bed frame components, finger joints, and furring strips, as well as I-joists. The Newsprint segment offers newsprint and sells to newspaper publishers worldwide, as well as to commercial printers in North America for a range of uses comprising inserts and flyers. The Specialty Papers segment offers various specialty papers, including uncoated mechanical papers, such as supercalendered and white papers, as well as coated mechanical papers and uncoated freesheet papers. Its specialty papers are used in books, retail inserts, direct mail, coupons, magazines, catalogs, bags, and other commercial printing applications. This segment sells specialty papers to commercial printers, direct mailers, publishers, catalogers, and retailers. The company also produces electricity at seven cogeneration facilities and seven hydroelectric dams. Resolute Forest Products Inc. is headquartered in Montréal, Canada.

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