Fibria (FBR) & UPM (UPMKY) Head-To-Head Survey

Fibria (NYSE: FBR) and UPM (OTCMKTS:UPMKY) are both large-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Risk & Volatility

Fibria has a beta of -0.1, indicating that its share price is 110% less volatile than the S&P 500. Comparatively, UPM has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Insider and Institutional Ownership

7.4% of Fibria shares are held by institutional investors. Comparatively, 0.2% of UPM shares are held by institutional investors. 40.2% of Fibria shares are held by insiders. Comparatively, 1.0% of UPM shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Fibria and UPM, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fibria 1 6 1 0 2.00
UPM 0 0 0 0 N/A

Fibria currently has a consensus target price of $16.25, suggesting a potential downside of 14.16%. Given Fibria’s higher probable upside, analysts clearly believe Fibria is more favorable than UPM.

Valuation & Earnings

This table compares Fibria and UPM’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fibria $3.68 billion 2.85 $339.90 million $0.61 31.03
UPM $11.31 billion 1.75 $1.10 billion N/A N/A

UPM has higher revenue and earnings than Fibria.

Dividends

Fibria pays an annual dividend of $0.11 per share and has a dividend yield of 0.6%. UPM pays an annual dividend of $1.18 per share and has a dividend yield of 3.2%. Fibria pays out 18.0% of its earnings in the form of a dividend.

Profitability

This table compares Fibria and UPM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fibria 10.33% 9.39% 3.61%
UPM 9.72% 11.93% 7.38%

Fibria Company Profile

Fibria Celulose S.A. produces, sells, and exports short fiber pulp in Brazil and internationally. It manufactures and sells bleached eucalyptus kraft pulp. The company has approximately 1,056,000 hectares of forest base in the states of São Paulo, Minas Gerais, Rio de Janeiro, Espírito Santo, Mato Grosso do Sul, and Bahia. It also exports its products to approximately 35 countries for educational, health, hygiene, and cleaning products. The company was formerly known as Votorantim Celulose e Papel S.A. and changed its name to Fibria Celulose S.A. in November 2009. Fibria Celulose S.A. was founded in 1988 and is headquartered in São Paulo, Brazil.

UPM Company Profile

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.

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