Contrasting UPM-Kymmene (OTCMKTS:UPMKY) and Western Forest Products (OTCMKTS:WFSTF)

UPM-Kymmene (OTCMKTS:UPMKY) and Western Forest Products (OTCMKTS:WFSTF) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Valuation & Earnings

This table compares UPM-Kymmene and Western Forest Products”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UPM-Kymmene	$12.38 billion	1.14	$1.77 billion	$2.65	9.98
Western Forest Products	N/A	N/A	N/A	$0.26	48.85

UPM-Kymmene has higher revenue and earnings than Western Forest Products. UPM-Kymmene is trading at a lower price-to-earnings ratio than Western Forest Products, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares UPM-Kymmene and Western Forest Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UPM-Kymmene	13.76%	12.57%	8.65%
Western Forest Products	N/A	N/A	N/A

Institutional & Insider Ownership

0.6% of UPM-Kymmene shares are held by institutional investors. Comparatively, 75.3% of Western Forest Products shares are held by institutional investors. 1.0% of UPM-Kymmene shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

UPM-Kymmene pays an annual dividend of $1.21 per share and has a dividend yield of 4.6%. Western Forest Products pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. UPM-Kymmene pays out 45.7% of its earnings in the form of a dividend. Western Forest Products pays out 22.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a summary of current ratings and price targets for UPM-Kymmene and Western Forest Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UPM-Kymmene	0	0	0	0	0.00
Western Forest Products	0	4	0	0	2.00

Summary

UPM-Kymmene beats Western Forest Products on 7 of the 11 factors compared between the two stocks.

About UPM-Kymmene

UPM-Kymmene Oyj operates in the forest-based bio industry. It operates through UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers, UPM Plywood, and Other operations segments. The company provides eucalyptus, birch, and softwood pulp grades for tissue, specialty and graphic papers, boards, and packaging; sawn timber for construction, packaging, distribution, joinery, and furniture industries; and wood-based renewable diesel and renewable naphtha for fuel distributors, transportation, and oil and petrochemicals industries. It is also involved in the generation of electricity through hydro, nuclear, and condensing power plants. In addition, the company offers self-adhesive papers and film label stocks for product and information labelling to label printers and brand owners in food, beverage, personal care, pharmaceutical, and retail segments; label papers and release liners, fine papers, and flexible packaging, 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, liquefied natural gas shipbuilding, and other manufacturing industries; wood and wood-based biomass, and forestry services for woodland and forest owners; outdoor products for construction, and granulates for injection molding and extrusion; wood-based lignin products for industrial use and cell culture hydrogel products for biomedical applications; and biomedical products. The company primarily operates in Europe, North America, and Asia. UPM-Kymmene Oyj was founded in 1995 and is headquartered in Helsinki, Finland.

About Western Forest Products

Western Forest Products Inc. operates as an integrated softwoods forest products company in Canada, the United States, Japan, China, Europe, and internationally. It is involved in timber harvesting, sawmilling logs into specialty lumber, value-added lumber and glulam remanufacturing, and wholesaling purchased lumber. The company also provides door and window; outdoor structure; and fencing products. Its products have applications in outdoor living, exterior appearance, interior living, industrial, and structural applications. Western Forest Products Inc. was founded in 1955 and is headquartered in Vancouver, Canada.