Comparing Sappi (OTCMKTS:SPPJY) & Magnera (NYSE:MAGN)

Sappi (OTCMKTS:SPPJY) and Magnera (NYSE:MAGN) are both small-cap materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Risk & Volatility

Sappi has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Magnera has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sappi and Magnera”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sappi	$5.42 billion	0.09	-$177.00 million	($1.36)	-0.62
Magnera	$3.20 billion	0.13	-$159.00 million	($2.01)	-5.91

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

Institutional and Insider Ownership

76.9% of Magnera shares are held by institutional investors. 0.7% of Sappi shares are held by insiders. Comparatively, 1.0% of Magnera shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Sappi and Magnera, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sappi	0	1	0	0	2.00
Magnera	1	2	0	0	1.67

Magnera has a consensus target price of $16.00, indicating a potential upside of 34.75%. Given Magnera’s higher possible upside, analysts plainly believe Magnera is more favorable than Sappi.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sappi	-15.44%	-6.41%	-2.30%
Magnera	-3.41%	-10.77%	-2.87%

Summary

Magnera beats Sappi on 7 of the 13 factors compared between the two stocks.

About Sappi

Sappi Limited, together with its subsidiaries, engages in the provision of materials made from woodfiber-based renewable resources in Europe, North America, and South Africa. The company manufacture and sells dissolving pulp, and wood and paper pulp; graphic papers, coated and uncoated papers, and casting and release papers; and packaging and specialty papers, including packaging and specialty papers, including flexible packaging papers, label papers, functional paper packaging products, containerboards, paperboards, silicone base papers, and dye sublimation papers. It also provides biomaterials, such as valida, lignin, furfural, and sweeteners, as well as forestry products; and engages in the treasury and insurance business. The company was founded in 1936 and is headquartered in Johannesburg, South Africa.

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.