Contrasting Sylvamo (NYSE:SLVM) and Smurfit Westrock (NYSE:SW)

Sylvamo (NYSE:SLVM) and Smurfit Westrock (NYSE:SW) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Institutional and Insider Ownership

91.2% of Sylvamo shares are owned by institutional investors. Comparatively, 83.4% of Smurfit Westrock shares are owned by institutional investors. 0.7% of Sylvamo shares are owned by insiders. Comparatively, 0.5% of Smurfit Westrock shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Sylvamo pays an annual dividend of $1.80 per share and has a dividend yield of 4.0%. Smurfit Westrock pays an annual dividend of $1.72 per share and has a dividend yield of 5.0%. Sylvamo pays out 41.2% of its earnings in the form of a dividend. Smurfit Westrock pays out 120.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sylvamo has raised its dividend for 3 consecutive years.

Profitability

This table compares Sylvamo and Smurfit Westrock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sylvamo	5.25%	19.72%	6.87%
Smurfit Westrock	2.40%	6.21%	2.49%

Valuation & Earnings

This table compares Sylvamo and Smurfit Westrock”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sylvamo	$3.77 billion	0.47	$302.00 million	$4.37	10.28
Smurfit Westrock	$31.14 billion	0.57	$319.00 million	$1.43	23.92

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

Analyst Recommendations

This is a breakdown of current recommendations for Sylvamo and Smurfit Westrock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sylvamo	2	2	0	0	1.50
Smurfit Westrock	0	1	10	1	3.00

Sylvamo currently has a consensus price target of $56.50, indicating a potential upside of 25.78%. Smurfit Westrock has a consensus price target of $55.30, indicating a potential upside of 61.66%. Given Smurfit Westrock’s stronger consensus rating and higher probable upside, analysts clearly believe Smurfit Westrock is more favorable than Sylvamo.

Risk & Volatility

Sylvamo has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Smurfit Westrock has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Summary

Smurfit Westrock beats Sylvamo on 10 of the 18 factors compared between the two stocks.

About Sylvamo

Sylvamo Corporation produces and markets uncoated freesheet for cutsize, offset paper, and pulp in Latin America, Europe, and North America. The company operates through Europe, Latin America, and North America segments. The Europe segment offers copy, tinted, and colored laser printing paper under REY Adagio and Pro-Design brands; and graphic and high-speed inkjet printing papers under the brand Jetstar; as well as produces uncoated freesheet papers. The Latin America segment focuses on uncoated freesheet paper under Chamex, Chamequinho and Chambril brands, as well as produces HP papers. This segment also operates integrated mills and non-integrated mills. The North America segment offers imaging, commercial printing, and converting papers, as well as uncoated papers under Hammermill, Springhill, Williamsburg, Accent, DRM and Postmark brand names. It distributes its products through a variety of channels, including retail merchants, e-commerce, agents, resellers, and paper distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.

About Smurfit Westrock

Smurfit Westrock Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland and internationally. The company produces containerboard that it converts into corrugated containers or sells to third parties, as well as produces other types of paper, such as consumer packaging board, sack paper, graphic paper, solid board and graphic board, and other paper-based packaging products, such as consumer packaging, solid board packaging, paper sacks, and other packaging products, including bag-in-box. It also produces linerboard and corrugated medium, paperboard, and non-packaging grades of paper, as well as converted products, such as folding cartons and corrugated boxes, and other products; recycled paper-based packaging products; and packaging machinery. The company primarily serves food and beverage, e-commerce, retail, consumer goods, industrial, and foodservice markets. Smurfit Westrock Plc was founded in 1934 and is headquartered in Dublin, Ireland.