Schweitzer-Mauduit International (NYSE: SWM) and Champion International Paper (NYSE:IP) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
Institutional and Insider Ownership
86.8% of Schweitzer-Mauduit International shares are owned by institutional investors. Comparatively, 82.6% of Champion International Paper shares are owned by institutional investors. 1.0% of Schweitzer-Mauduit International shares are owned by company insiders. Comparatively, 0.6% of Champion International Paper shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Schweitzer-Mauduit International pays an annual dividend of $1.72 per share and has a dividend yield of 4.4%. Champion International Paper pays an annual dividend of $1.90 per share and has a dividend yield of 3.6%. Schweitzer-Mauduit International pays out 54.1% of its earnings in the form of a dividend. Champion International Paper pays out 54.4% 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. Schweitzer-Mauduit International has raised its dividend for 6 consecutive years and Champion International Paper has raised its dividend for 6 consecutive years. Schweitzer-Mauduit International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Schweitzer-Mauduit International and Champion International Paper’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Schweitzer-Mauduit International||$982.00 million||1.23||$34.50 million||$3.18||12.39|
|Champion International Paper||$21.74 billion||0.99||$2.14 billion||$3.49||14.93|
Champion International Paper has higher revenue and earnings than Schweitzer-Mauduit International. Schweitzer-Mauduit International is trading at a lower price-to-earnings ratio than Champion International Paper, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Schweitzer-Mauduit International has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Champion International Paper has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Schweitzer-Mauduit International and Champion International Paper, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Champion International Paper||1||7||6||0||2.36|
Schweitzer-Mauduit International currently has a consensus price target of $47.00, suggesting a potential upside of 19.29%. Champion International Paper has a consensus price target of $64.09, suggesting a potential upside of 22.99%. Given Champion International Paper’s higher possible upside, analysts clearly believe Champion International Paper is more favorable than Schweitzer-Mauduit International.
This table compares Schweitzer-Mauduit International and Champion International Paper’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Champion International Paper||9.36%||29.05%||4.44%|
Champion International Paper beats Schweitzer-Mauduit International on 9 of the 16 factors compared between the two stocks.
Schweitzer-Mauduit International Company Profile
Schweitzer-Mauduit International, Inc., together with its subsidiaries, provides engineered solutions and advanced materials for various industries worldwide. The company operates through two segments, Engineered Papers and Advanced Materials & Structures. The Engineered Papers segment produces and sells cigarette papers, reconstituted tobacco leaf, and wrapper and binder products to cigarette and cigar manufacturers; and other non-tobacco paper products. It also offers low ignition propensity cigarette paper; and lightweight papers for printing and writing, flooring laminates, and food service packaging. The Advanced Materials & Structures segment manufactures resin-based nets, films, and other non-wovens for filtration, infrastructure and construction, transportation, medical, and industrial applications. Schweitzer-Mauduit International, Inc. was founded in 1995 and is headquartered in Alpharetta, Georgia.
Champion International Paper Company Profile
International Paper Company operates as a paper and packaging company primarily in North America, Europe, Latin America, North Africa, India, and Russia. It operates through three segments: Industrial Packaging, Global Cellulose Fibers, and Printing Papers. The Industrial Packaging segment manufactures containerboards, including linerboard, medium, whitetop, recycled linerboard, recycled medium, and saturating kraft. The Global Cellulose Fibers segment provides fluff, market, and specialty pulps that are used in absorbent hygiene products, tissue and paper products, and non-absorbent end applications. The Printing Papers segment produces printing and writing papers, such as uncoated papers for end use applications, including brochures, pamphlets, greeting cards, books, annual reports, and direct mail, as well as envelopes, tablets, business forms, and file folders. This segment sells uncoated papers under the Hammermill, Springhill, Williamsburg, Postmark, Accent, Great White, Chamex, Ballet, Rey, Pol, and Svetocopy brand names. The company sells its products directly to end users and converters, as well as through agents, resellers, and paper distributors. International Paper Company was founded in 1898 and is headquartered in Memphis, Tennessee.
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