Head-To-Head Contrast: Sappi (OTCMKTS:SPPJY) & Louisiana-Pacific (NYSE:LPX)

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

Valuation & Earnings

This table compares Louisiana-Pacific and Sappi”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Louisiana-Pacific	$2.71 billion	1.69	$146.00 million	$0.79	83.09
Sappi	$5.42 billion	0.09	-$177.00 million	($1.36)	-0.61

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

Volatility & Risk

Louisiana-Pacific has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500. Comparatively, Sappi has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Insider & Institutional Ownership

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Louisiana-Pacific	2.19%	4.67%	3.10%
Sappi	-15.44%	-6.41%	-2.30%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Louisiana-Pacific and Sappi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Louisiana-Pacific	1	2	12	0	2.73
Sappi	0	1	0	0	2.00

Louisiana-Pacific currently has a consensus price target of $93.33, suggesting a potential upside of 42.18%. Given Louisiana-Pacific’s stronger consensus rating and higher possible upside, equities analysts plainly believe Louisiana-Pacific is more favorable than Sappi.

Summary

Louisiana-Pacific beats Sappi on 12 of the 14 factors compared between the two stocks.

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.

About Sappi

Sappi Limited, together with its subsidiaries, engages in the provision of materials made from woodfiber-based renewable resources in Europe, North America, and South Africa. The company manufacture and sells dissolving pulp, and wood and paper pulp; graphic papers, coated and uncoated papers, and casting and release papers; and packaging and specialty papers, including packaging and specialty papers, including flexible packaging papers, label papers, functional paper packaging products, containerboards, paperboards, silicone base papers, and dye sublimation papers. It also provides biomaterials, such as valida, lignin, furfural, and sweeteners, as well as forestry products; and engages in the treasury and insurance business. The company was founded in 1936 and is headquartered in Johannesburg, South Africa.