Comparing UPM (UPMKY) & Kapstone (KS)

UPM (OTCMKTS: UPMKY) and Kapstone (NYSE:KS) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for UPM and Kapstone, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UPM 0 0 0 0 N/A
Kapstone 0 7 1 0 2.13

Kapstone has a consensus target price of $30.80, suggesting a potential downside of 10.72%. Given Kapstone’s higher probable upside, analysts clearly believe Kapstone is more favorable than UPM.

Profitability

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

Net Margins Return on Equity Return on Assets
UPM 9.72% 11.93% 7.38%
Kapstone 8.07% 15.10% 4.70%

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UPM $11.31 billion 1.74 $1.10 billion N/A N/A
Kapstone $3.32 billion 1.02 $243.50 million $1.32 26.14

UPM has higher revenue and earnings than Kapstone.

Dividends

UPM pays an annual dividend of $1.18 per share and has a dividend yield of 3.2%. Kapstone pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Kapstone pays out 30.3% of its earnings in the form of a dividend.

Institutional and Insider Ownership

0.2% of UPM shares are held by institutional investors. Comparatively, 82.9% of Kapstone shares are held by institutional investors. 1.0% of UPM shares are held by insiders. Comparatively, 13.4% of Kapstone shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

UPM has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Kapstone has a beta of 3.02, indicating that its stock price is 202% more volatile than the S&P 500.

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.

Kapstone Company Profile

KapStone Paper and Packaging Corporation produces and sells a range of containerboards, corrugated products, and specialty paper products in the United States and internationally. The company operates in two segments, Paper and Packaging, and Distribution. The Paper and Packaging segment offers containerboards consisting of linerboard and corrugated medium to manufacture corrugated containers for packaging products; and corrugated products. It also offers specialty paper products, including kraft paper, such as multiwall paper used to produce bags for agricultural products, pet food, baking products, cement and chemicals; specialty products comprising shingle wraps, end caps, roll wraps, and dunnage bags; and lightweight paper. In addition, this segment provides saturating kraft paper under the Durasorb trade name for use in construction, electronics manufacturing, and furniture manufacturing industries; and unbleached folding carton board under the Kraftpak trade name to integrated and independent converters in the folding carton industry. The Distribution segment distributes corrugated and other specialty packaging products consisting of stretch films, void fills, carton sealing tapes, and other specialty tapes. KapStone Paper and Packaging Corporation was founded in 2005 and is headquartered in Northbrook, Illinois.

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