Financial Comparison: West Fraser Timber (OTCMKTS:WFTBF) vs. Clearwater Paper (NYSE:CLW)

West Fraser Timber (OTCMKTS:WFTBF) and Clearwater Paper (NYSE:CLW) are both materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for West Fraser Timber and Clearwater Paper, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Fraser Timber	0	0	0	0	0.00
Clearwater Paper	1	5	2	0	2.12

Clearwater Paper has a consensus target price of $18.50, suggesting a potential downside of 12.87%. Given Clearwater Paper’s stronger consensus rating and higher probable upside, analysts clearly believe Clearwater Paper is more favorable than West Fraser Timber.

Valuation and Earnings

This table compares West Fraser Timber and Clearwater Paper”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Fraser Timber	N/A	N/A	N/A	$3.84	18.15
Clearwater Paper	$1.56 billion	0.22	-$18.60 million	($3.04)	-6.98

West Fraser Timber has higher earnings, but lower revenue than Clearwater Paper. Clearwater Paper is trading at a lower price-to-earnings ratio than West Fraser Timber, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

31.7% of West Fraser Timber shares are owned by institutional investors. Comparatively, 90.0% of Clearwater Paper shares are owned by institutional investors. 2.4% of Clearwater Paper shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares West Fraser Timber and Clearwater Paper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Fraser Timber	N/A	N/A	N/A
Clearwater Paper	-3.24%	-7.95%	-4.06%

Summary

Clearwater Paper beats West Fraser Timber on 6 of the 11 factors compared between the two stocks.

About West Fraser Timber

West Fraser Timber Co. Ltd., a diversified wood products company, produces and sells lumber, panels, and pulp and papers in western Canada and the southern United States. It offers spruce-pine-fir, Douglas Fir-Larch, Hem-Fir tree, and southern yellow pine lumber; treated wood products; and newsprint, wood chips, and other residuals and energy products. The company also provides medium density fiberboard panels and plywood; laminated veneer lumber wood products; and northern bleached softwood Kraft pulp used to produce various paper products, including printing and writing papers, specialty grades, and various tissue products. In addition, it offers bleached chemical thermo-mechanical pulp that is used to produce coated board grades, printing and writing paper, and paper towel/napkin grades, as well as specialty papers and tissue grades. The company exports lumber to the Far East, Asia, the Caribbean, Europe, the Middle East, and South America. West Fraser Timber Co. Ltd. was founded in 1955 and is based in Vancouver, Canada.

About Clearwater Paper

Clearwater Paper Corporation manufactures and supplies bleached paperboards, and consumer and parent roll tissues in the United States and internationally. It operates through Pulp and Paperboard, and Consumer Products segments. The Pulp and Paperboard segment manufactures and markets bleached paperboard; Solid Bleached Sulfate paperboard that is used to produce folding cartons, liquid packaging, cups and plates, blister and carded packaging, and top sheet and commercial printing items; and hardwood and softwood pulp, as well as offers services that include custom sheeting, slitting, and cutting. It sells its products to carton converters, folding carton converters, merchants, and commercial printers. The Consumer Products segment provides a line of at-home tissue products, including bath tissues, paper towels, facial tissues, and napkins; recycled fiber value grade products; and away-from-home tissues. This segment sells its products to retailers, including grocery, club, mass merchants, and discount stores. The company was incorporated in 2005 and is based in Spokane, Washington.