Analyzing UPM-Kymmene Oyj (OTCMKTS:UPMMY) & West Fraser Timber (NYSE:WFG)

West Fraser Timber (NYSE:WFG) and UPM-Kymmene Oyj (OTCMKTS:UPMMY) are both materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for West Fraser Timber and UPM-Kymmene Oyj, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Fraser Timber	1	3	4	0	2.38
UPM-Kymmene Oyj	0	0	0	0	0.00

West Fraser Timber presently has a consensus target price of $83.20, suggesting a potential upside of 20.77%. Given West Fraser Timber’s stronger consensus rating and higher probable upside, analysts clearly believe West Fraser Timber is more favorable than UPM-Kymmene Oyj.

Valuation & Earnings

This table compares West Fraser Timber and UPM-Kymmene Oyj”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Fraser Timber	$5.46 billion	0.99	-$937.00 million	($15.44)	-4.46
UPM-Kymmene Oyj	N/A	N/A	N/A	N/A	N/A

UPM-Kymmene Oyj has lower revenue, but higher earnings than West Fraser Timber.

Profitability

This table compares West Fraser Timber and UPM-Kymmene Oyj’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Fraser Timber	-22.98%	-10.84%	-8.19%
UPM-Kymmene Oyj	N/A	N/A	N/A

Institutional and Insider Ownership

40.2% of West Fraser Timber shares are held by institutional investors. 1.8% of West Fraser Timber shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

West Fraser Timber beats UPM-Kymmene Oyj on 6 of the 9 factors compared between the two stocks.

About West Fraser Timber

West Fraser Timber Co. Ltd., a diversified wood products company, engages in manufacturing, selling, marketing, and distributing lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals and renewable energy. It offers spruce-pine-fir, douglas fir-larch, hem-fir, and southern yellow pine lumber, treated wood products, medium density fiberboard panels and plywood, oriented strand board, and laminated veneer lumber wood products, as well as particleboards. The company also provides northern bleached softwood Kraft pulp and bleached chemical thermo-mechanical pulp used to produce various paper products, including printing and writing papers, paperboard products, tissue and towel products, and a variety of other paper grades. Further, it offers bioproducts, including bioenergy and biomaterial. Its products are used in home construction, repair and remodeling, papers, tissue, and box materials, and industrial applications. The company sells its products to major retail chains, contractor supply yards, and wholesalers, as well as industrial customers for further processing or as components for other products in Canada, the United States, the United Kingdom, Europe, and internationally. West Fraser Timber Co. Ltd. was founded in 1955 and is headquartered in Vancouver, Canada.

About UPM-Kymmene Oyj

UPM-Kymmene Oyj, together with its subsidiaries, engages in the forest-based bioindustry in Europe, North America, Asia, and internationally. It operates through UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers, UPM Plywood, and Other Operations segments. The company provides softwood, birch, and eucalyptus pulp for tissue, specialty, and graphic papers and packaging; sawn timber for joinery, packaging, furniture, planning, and construction industries; and wood-based renewable diesel and renewable naphtha for transport and petrochemical industry. It is also involved in the generation of electricity through hydro, thermal, and nuclear power plants. In addition, the company offers self-adhesive label materials for branding and promotion, information, and functional labeling in the food, beverage, personal care, pharmaceutical, and logistics segments; and specialty packaging materials, such as label papers, release liners, office papers, and flexible packaging for labeling, packing, commercial siliconizing, and printing, as well as graphic papers for advertising, publishing, and home and office use. Further, it provides plywood and veneer products for construction, vehicle flooring, liquefied natural gas shipbuilding, and parquet manufacturing, as well as for other industrial applications; wood and wood-based biomass, and forestry services for forest investors and owners; wood-based biomedical products, such as nano-fibrillar cellulose for clinical and life science applications; wood-based lignin products for industrial use; and UPM ProFi decking products and UPM formi granules. Additionally, the company offers financial portfolio management services. UPM-Kymmene Oyj was founded in 1871 and is headquartered in Helsinki, Finland.