Critical Contrast: Louisiana-Pacific (NYSE:LPX) vs. Klabin (OTCMKTS:KLBAY)

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

Insider and Institutional Ownership

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

Volatility & Risk

Louisiana-Pacific has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500. Comparatively, Klabin has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Louisiana-Pacific and Klabin, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Louisiana-Pacific	1	2	12	0	2.73
Klabin	0	2	0	0	2.00

Louisiana-Pacific presently has a consensus price target of $91.17, suggesting a potential upside of 37.76%. Given Louisiana-Pacific’s stronger consensus rating and higher probable upside, analysts clearly believe Louisiana-Pacific is more favorable than Klabin.

Dividends

Louisiana-Pacific pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. Klabin pays an annual dividend of $0.18 per share and has a dividend yield of 2.5%. 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. Klabin pays out 105.9% 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 raised its dividend for 7 consecutive years. Klabin is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Louisiana-Pacific	2.19%	4.67%	3.10%
Klabin	1.26%	1.72%	0.42%

Earnings and Valuation

This table compares Louisiana-Pacific and Klabin”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Louisiana-Pacific	$2.71 billion	1.71	$146.00 million	$0.79	83.77
Klabin	$3.71 billion	6.09	$251.30 million	$0.17	42.53

Klabin has higher revenue and earnings than Louisiana-Pacific. Klabin 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 Klabin on 12 of the 17 factors compared between the two stocks.

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.

About Klabin

Klabin S.A., together with its subsidiaries, produces and exports packaging paper and sustainable paper packaging solutions in Brazil and internationally. The company engages in the planting of pine and eucalyptus; and forestry management business. It also produces and sells hardwood (eucalyptus), softwood (pine), and fluffed pulp; and paperboard, sackraft, Kraftliner paper, and recycled paper. In addition, the company offers industrial bags, corrugated boxes, and other packaging products. Klabin S.A. was founded in 1899 and is headquartered in São Paulo, Brazil.