Head-To-Head Contrast: Suzano (NYSE:SUZ) versus Louisiana-Pacific (NYSE:LPX)

Suzano (NYSE:SUZ) and Louisiana-Pacific (NYSE:LPX) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Earnings & Valuation

This table compares Suzano and Louisiana-Pacific”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suzano	$8.97 billion	1.16	$2.40 billion	$1.26	6.69
Louisiana-Pacific	$2.71 billion	1.67	$146.00 million	$0.79	82.02

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

Insider and Institutional Ownership

2.5% of Suzano shares are owned by institutional investors. Comparatively, 94.7% of Louisiana-Pacific shares are owned by institutional investors. 0.7% of Louisiana-Pacific shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Suzano pays an annual dividend of $0.18 per share and has a dividend yield of 2.1%. Louisiana-Pacific pays an annual dividend of $1.20 per share and has a dividend yield of 1.9%. Suzano pays out 14.3% of its earnings in the form of a dividend. Louisiana-Pacific pays out 151.9% 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 has increased its dividend for 7 consecutive years. Suzano is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and price targets for Suzano and Louisiana-Pacific, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suzano	1	1	2	0	2.25
Louisiana-Pacific	1	2	12	0	2.73

Suzano currently has a consensus target price of $13.20, suggesting a potential upside of 56.68%. Louisiana-Pacific has a consensus target price of $93.33, suggesting a potential upside of 44.04%. Given Suzano’s higher probable upside, analysts clearly believe Suzano is more favorable than Louisiana-Pacific.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Suzano	17.20%	14.92%	4.18%
Louisiana-Pacific	2.19%	4.67%	3.10%

Risk and Volatility

Suzano has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Louisiana-Pacific has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500.

Summary

Suzano beats Louisiana-Pacific on 9 of the 17 factors compared between the two stocks.

About Suzano

Suzano S.A. produces and sells eucalyptus pulp and paper products in Brazil and internationally. It operates through Pulp and Paper segments. The company offers coated and uncoated printing and writing papers, paperboards, tissue papers, and market and fluff pulps; and lignin. It also engages in the research, development, and production of biofuel; operation of port terminals; power generation and distribution business; commercialization of equipment and parts; industrialization, commercialization, and exporting of pulp and standing wood; road freight transport; biotechnology research and development; and commercialization of paper and computer materials. In addition, the company is involved in the business office, production packaging, and financial fundraising activities; research, development, production, commercialization, and distribution of wood-based textile fibers, yarns, and filaments produced from cellulose and microfibrillated cellulose; and research and development of wood raw materials for the textile industry. Suzano S.A. was formerly known as Suzano Papel e Celulose S.A. and changed its name to Suzano S.A. in April 2019. The company was founded in 1924 and is headquartered in Salvador, Brazil.

About Louisiana-Pacific

Louisiana-Pacific Corporation, together with its subsidiaries, provides building solutions primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It operates through Siding, Oriented Strand Board, LP South America, and Other segments. The Siding segment offers LP SmartSide trim and siding products, LP SmartSide ExpertFinish trim and siding products, LP BuilderSeries lap siding products, and LP Outdoor Building Solutions; and engineered wood siding, trim, soffit, and fascia products. Its Oriented Strand Board segment manufactures and distributes oriented strand board structural panel products comprising LP TechShield radiant barriers, LP WeatherLogic air and water barriers, LP Legacy premium sub-flooring products, LP NovaCore, LP FlameBlock fire-rated sheathing products, and LP TopNotch sub-flooring products. The LP South America segment manufactures and distributes oriented strand board structural panel and siding products. This segment distributes and sells related products for the region's transition to wood frame construction. It offers timber and timberlands and other products and services. sells its products primarily to retailers, wholesalers, and homebuilding and industrial businesses in North America and South America, Asia, Australia, and Europe. The company was incorporated in 1972 and is headquartered in Nashville, Tennessee.