Head to Head Analysis: Stella-Jones (OTCMKTS:STLJF) versus Louisiana-Pacific (NYSE:LPX)

Stella-Jones (OTCMKTS:STLJF) and Louisiana-Pacific (NYSE:LPX) are both mid-cap materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Stella-Jones and Louisiana-Pacific, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stella-Jones	0	2	2	0	2.50
Louisiana-Pacific	2	1	12	0	2.67

Louisiana-Pacific has a consensus price target of $93.67, suggesting a potential upside of 41.87%. Given Louisiana-Pacific’s stronger consensus rating and higher possible upside, analysts plainly believe Louisiana-Pacific is more favorable than Stella-Jones.

Profitability

This table compares Stella-Jones and Louisiana-Pacific’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stella-Jones	8.66%	14.92%	7.39%
Louisiana-Pacific	2.19%	4.67%	3.10%

Insider and Institutional Ownership

94.7% of Louisiana-Pacific shares are owned by institutional investors. 0.7% of Louisiana-Pacific shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Stella-Jones pays an annual dividend of $0.98 per share and has a dividend yield of 2.0%. Louisiana-Pacific pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. Stella-Jones pays out 66.7% of its earnings in the form of a dividend. Louisiana-Pacific pays out 151.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Louisiana-Pacific has increased its dividend for 7 consecutive years. Stella-Jones is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Stella-Jones and Louisiana-Pacific”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stella-Jones	$2.50 billion	1.05	$241.19 million	$1.47	32.73
Louisiana-Pacific	$2.71 billion	1.70	$146.00 million	$0.79	83.57

Stella-Jones has higher earnings, but lower revenue than Louisiana-Pacific. Stella-Jones is trading at a lower price-to-earnings ratio than Louisiana-Pacific, indicating that it is currently the more affordable of the two stocks.

Summary

Louisiana-Pacific beats Stella-Jones on 9 of the 16 factors compared between the two stocks.

About Stella-Jones

Stella-Jones Inc. produces and sells pressure-treated wood products in Canada and the United States. It operates through two segments, Pressure-Treated Wood; and Logs and Lumber. The company offers railway ties and timbers for short line and commercial railroad operators; and wood utility poles for electrical utilities and telecommunication companies. It also provides residential lumber and accessories to retailers for outdoor applications; industrial products, which include wood for railway bridges and crossings, marine and foundation pilings, construction timbers, and coal tar-based products; and lumber for local home-building markets. Stella-Jones Inc. was incorporated in 1992 and is headquartered in Saint-Laurent, Canada.

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.