Analyzing Mercer International (NASDAQ:MERC) and Magnera (NYSE:MAGN)

Mercer International (NASDAQ:MERC) and Magnera (NYSE:MAGN) are both small-cap materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Volatility & Risk

Mercer International has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Magnera has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500.

Valuation & Earnings

This table compares Mercer International and Magnera”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercer International	$1.87 billion	0.02	-$497.89 million	($7.89)	-0.08
Magnera	$3.20 billion	0.15	-$159.00 million	($1.96)	-6.74

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

Insider and Institutional Ownership

85.8% of Mercer International shares are held by institutional investors. Comparatively, 76.9% of Magnera shares are held by institutional investors. 1.2% of Mercer International shares are held by company insiders. Comparatively, 1.0% of Magnera shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Mercer International and Magnera, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercer International	4	2	0	0	1.33
Magnera	1	2	0	0	1.67

Mercer International presently has a consensus price target of $1.20, suggesting a potential upside of 89.87%. Magnera has a consensus price target of $16.00, suggesting a potential upside of 21.07%. Given Mercer International’s higher possible upside, research analysts plainly believe Mercer International is more favorable than Magnera.

Profitability

This table compares Mercer International and Magnera’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercer International	-28.51%	-136.20%	-13.64%
Magnera	-3.37%	-10.30%	-2.77%

Summary

Magnera beats Mercer International on 9 of the 13 factors compared between the two stocks.

About Mercer International

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) and northern bleached hardwood kraft (NBHK) pulp worldwide. The company operates through two segments, Pulp and Solid Wood. It manufactures, sells, and distributes pulp, electricity, and chemicals through pulp mills. The company also manufactures, distributes, and sells lumber, cross-laminated timber, finger joint lumber, glue-laminated timber, wood pallets, electricity, biofuels, and wood residuals. In addition, it generates and sells green energy produced from biomass cogeneration power plant to third party. Further, it produces and sells NBSK pulp manufactured from softwood; green energy using carbon-neutral biofuels, such as black liquor and wood waste; tall oil from black liquor for use as a chemical additive and green energy source; bio extractives and biomaterials, including lignin, turpentine, cellulose filaments, and sandalwood oil; and biofuels; as well as provides transportation and logistics services. The company sells its pulp to pulp markets, integrated paper and paperboard manufacturers; and lumber products to distributors, construction firms, secondary manufacturers, retail yards, and home centers. Mercer International Inc. was founded in 1968 and is headquartered in Vancouver, Canada.

About Magnera

Magnera’s purpose is to better the world with new possibilities made real. By continuously co-creating and innovating with our partners, we develop original material solutions that make a brighter future possible. With a breadth of technologies and a passion for what we create, Magnera’s solutions propel our customers’ goals forward and solve end-users’ problems, every day.