UPM (OTCMKTS: UPMKY) and Verso (NYSE:VRS) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Institutional and Insider Ownership
0.2% of UPM shares are owned by institutional investors. Comparatively, 84.9% of Verso shares are owned by institutional investors. 1.0% of UPM shares are owned by company insiders. Comparatively, 4.2% of Verso shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares UPM and Verso’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares UPM and Verso’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|UPM||$11.31 billion||1.75||$1.10 billion||N/A||N/A|
|Verso||$2.46 billion||0.29||-$30.00 million||($0.75)||-27.59|
UPM has higher revenue and earnings than Verso.
Volatility and Risk
UPM has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Verso has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.
UPM pays an annual dividend of $1.18 per share and has a dividend yield of 3.2%. Verso does not pay a dividend.
This is a breakdown of recent ratings and target prices for UPM and Verso, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Verso has a consensus target price of $28.00, indicating a potential upside of 35.33%. Given Verso’s higher possible upside, analysts clearly believe Verso is more favorable than UPM.
UPM beats Verso on 9 of the 13 factors compared between the two stocks.
UPM-Kymmene Oyj operates in the forest-based bio industry. It operates through UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA, UPM Plywood, and Other Operations divisions. The company provides eucalyptus, birch, and softwood pulp grades for tissue, specialty, graphic papers, and packaging; wood-based renewable diesel and naphtha for fuel distributors and transportation industries; and sawn timber for joinery, packaging, distribution, and construction industries. It is also involved in the generation of electricity through hydro, nuclear, and condensing power plants in the Finnish and Scandinavian electricity market. In addition, the company offers self-adhesive papers and film label stocks for product and information labelling in label printers and brand owners in food, personal care, pharmaceutical, and retail segment; label papers and release liners, and fine papers, as well as label and packaging papers production lines for retailers, printers, publishers, distributors, and paper converters; and graphic papers for advertising, magazines, newspapers, and home and office to publishers, cataloguers, retailers, printers, and merchants. Further, it provides plywood and veneer products for construction, vehicle flooring, LNG shipbuilding, and other manufacturing industries; wood and forestry service for UPM mills and forest owners; and chemical building blocks, lignin products, biofibrils, and biomedical products, as well as outdoor products and composite material for construction, and granulates for injection molding and extrusion. The company was founded in 1995 and is headquartered in Helsinki, Finland.
Verso Corporation produces and sells coated papers in North America. It operates through two segments, Paper and Pulp. The company offers coated freesheet and coated groundwood, specialty, inkjet and digital, supercalendered, and uncoated freesheet papers; and northern bleached hardwood Kraft pulp to manufacture printing, writing, and specialty paper grades, as well as to manufacture tissue products. Its paper products are used primarily in media and marketing applications, including catalogs, magazines, and commercial printing applications, such as high-end advertising brochures, annual reports, and direct-mail advertising; and specialty applications comprising flexible packaging, and label and converting. The company was formerly known as Verso Paper Corp. and changed its name to Verso Corporation in January 2015. Verso Corporation was founded in 2006 and is headquartered in Miamisburg, Ohio.
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