Critical Contrast: Stella-Jones (OTCMKTS:STLJF) and Magnera (NYSE:MAGN)

Magnera (NYSE:MAGN) and Stella-Jones (OTCMKTS:STLJF) are both materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Insider and Institutional Ownership

76.9% of Magnera shares are owned by institutional investors. 1.0% of Magnera shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Magnera and Stella-Jones, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnera	1	2	0	0	1.67
Stella-Jones	0	2	2	0	2.50

Magnera currently has a consensus target price of $16.00, suggesting a potential upside of 37.75%. Given Magnera’s higher possible upside, research analysts clearly believe Magnera is more favorable than Stella-Jones.

Profitability

This table compares Magnera and Stella-Jones’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnera	-3.41%	-10.77%	-2.87%
Stella-Jones	8.66%	14.92%	7.39%

Valuation & Earnings

This table compares Magnera and Stella-Jones”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnera	$3.20 billion	0.13	-$159.00 million	($2.01)	-5.78
Stella-Jones	$2.50 billion	1.08	$241.19 million	$1.47	33.75

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

Summary

Stella-Jones beats Magnera on 9 of the 13 factors compared between the two stocks.

About Magnera

Magnera’s purpose is to better the world with new possibilities made real. By continuously co-creating and innovating with our partners, we develop original material solutions that make a brighter future possible. With a breadth of technologies and a passion for what we create, Magnera’s solutions propel our customers’ goals forward and solve end-users’ problems, every day.

About Stella-Jones

Stella-Jones Inc. produces and sells pressure-treated wood products in Canada and the United States. It operates through two segments, Pressure-Treated Wood; and Logs and Lumber. The company offers railway ties and timbers for short line and commercial railroad operators; and wood utility poles for electrical utilities and telecommunication companies. It also provides residential lumber and accessories to retailers for outdoor applications; industrial products, which include wood for railway bridges and crossings, marine and foundation pilings, construction timbers, and coal tar-based products; and lumber for local home-building markets. Stella-Jones Inc. was incorporated in 1992 and is headquartered in Saint-Laurent, Canada.