Critical Comparison: Enviva Partners (EVA) vs. Louisiana-Pacific (LPX)

Enviva Partners (NYSE: EVA) and Louisiana-Pacific (NYSE:LPX) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Volatility & Risk

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Enviva Partners has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Louisiana-Pacific has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Earnings and Valuation

This table compares Enviva Partners and Louisiana-Pacific’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enviva Partners $543.22 million 1.35 $17.51 million $0.61 45.49
Louisiana-Pacific $2.73 billion 1.58 $389.80 million $2.33 12.81

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

Dividends

Enviva Partners pays an annual dividend of $2.48 per share and has a dividend yield of 8.9%. Louisiana-Pacific pays an annual dividend of $0.52 per share and has a dividend yield of 1.7%. Enviva Partners pays out 406.6% 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 pays out 22.3% of its earnings in the form of a dividend. Enviva Partners has raised its dividend for 2 consecutive years. Enviva Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

94.6% of Louisiana-Pacific shares are held by institutional investors. 1.5% of Louisiana-Pacific shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Enviva Partners and Louisiana-Pacific, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enviva Partners 0 0 2 0 3.00
Louisiana-Pacific 1 6 3 0 2.20

Enviva Partners presently has a consensus target price of $33.50, suggesting a potential upside of 20.72%. Louisiana-Pacific has a consensus target price of $32.67, suggesting a potential upside of 9.44%. Given Enviva Partners’ stronger consensus rating and higher probable upside, equities analysts clearly believe Enviva Partners is more favorable than Louisiana-Pacific.

Profitability

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

Net Margins Return on Equity Return on Assets
Enviva Partners 3.80% 7.65% 2.89%
Louisiana-Pacific 14.26% 24.05% 15.16%

Summary

Louisiana-Pacific beats Enviva Partners on 12 of the 17 factors compared between the two stocks.

About Enviva Partners

Enviva Partners, LP is a supplier of utility-grade wood pellets to power generators. The Company procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-water marine terminals, where they are received, stored and loaded onto oceangoing vessels for transport to the Company’s principally Northern European customers. The Company’s principal product, utility-grade wood pellets, is a traded energy commodity that is used as a substitute for coal in both dedicated and co-fired power generation and combined heat and power plants. It enables power generators to generate electricity. The Company’s customers use its wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets are exported from the Company’s deep-water marine terminal in Chesapeake, Virginia, from a deep-water marine terminal in Wilmington, North Carolina.

About Louisiana-Pacific

Louisiana-Pacific Corporation, together with its subsidiaries, manufactures building products primarily for use in new home construction, repair and remodeling, and outdoor structures, as well as light industrial and commercial construction applications. It operates through four segments: Siding; North America Oriented Strand Board (OSB); Engineered Wood Products; and South America. The Siding segment offers siding products and related accessories, such as wood-based siding, trim, soffit, and fascia products; and CanExel siding and accessory products, including pre-finished lap and trim products, as well as outdoor building products. The OSB segment manufactures and distributes structural panel products comprising OSBs, TechShield radiant barriers, TopNotch sub-floorings, Legacy super tough products, moisture-resistant sub-floorings, and FlameBlock fire-rated sheathing products. The Engineered Wood Products segment provides laminated veneer lumber, laminated strand lumber, and other related products; and I-joists, which are used principally in residential and commercial floorings, roofing systems, and other structural applications. The South America segment manufactures and distributes OSB and siding products in South America and various export markets. This segment also distributes and sells related products to augment the transition to wood frame construction. The company also offers timber and timberlands, as well as other products and services. Louisiana-Pacific Corporation sells its products, primarily to retail home centers, manufactured housing producers, distributors, and wholesalers in North America and South America, as well as in Asia, Australia, and Europe. The company was founded in 1973 and is headquartered in Nashville, Tennessee.

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