Analyzing International Paper (NYSE:IP) and Crown (NYSE:CCK)

Crown (NYSE:CCK) and International Paper (NYSE:IP) are both large-cap materials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, risk, profitability, valuation, analyst recommendations and earnings.

Earnings & Valuation

This table compares Crown and International Paper”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crown	$12.37 billion	1.00	$738.00 million	$6.95	16.42
International Paper	$23.63 billion	0.76	-$3.52 billion	($6.52)	-5.23

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

Analyst Ratings

This is a breakdown of current recommendations for Crown and International Paper, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crown	0	5	12	0	2.71
International Paper	1	3	10	0	2.64

Crown currently has a consensus target price of $127.73, indicating a potential upside of 11.94%. International Paper has a consensus target price of $46.90, indicating a potential upside of 37.44%. Given International Paper’s higher possible upside, analysts clearly believe International Paper is more favorable than Crown.

Risk & Volatility

Crown has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, International Paper has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares Crown and International Paper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crown	5.91%	27.33%	6.52%
International Paper	-14.20%	-1.09%	-0.44%

Dividends

Crown pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. International Paper pays an annual dividend of $1.85 per share and has a dividend yield of 5.4%. Crown pays out 20.1% of its earnings in the form of a dividend. International Paper pays out -28.4% 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. Crown has increased its dividend for 4 consecutive years. International Paper is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

90.9% of Crown shares are held by institutional investors. Comparatively, 82.0% of International Paper shares are held by institutional investors. 0.9% of Crown shares are held by insiders. Comparatively, 0.2% of International Paper shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Crown beats International Paper on 12 of the 17 factors compared between the two stocks.

About Crown

Crown Holdings, Inc., together with its subsidiaries, engages in the packaging business in the United States and internationally. It operates through Americas Beverage, European Beverage, Asia Pacific, and Transit Packaging segments. The company manufactures and sells recyclable aluminum beverage cans and ends, glass bottles, steel crowns, aluminum caps, non-beverage cans, and aerosol cans and closures. It also provides manual, semi-automatic, and automatic equipment and tools to apply and remove consumables, such as straps and films; protective solutions, including airbags, edge protectors, and honeycomb products; and steel and plastic consumables include steel strap, plastic strap, industrial film, and other related products. The company serves food industries, including pet food, personal care, household, and industrial products. Crown Holdings, Inc. was founded in 1892 and is headquartered in Yardley, Pennsylvania.

About International Paper

International Paper Company produces and sells renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. It operates through two segments, Industrial Packaging and Global Cellulose Fibers. The company offers linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft; and pulp for a range of applications, such as diapers, towel and tissue products, feminine care, incontinence, and other personal care products, as well as specialty pulps for use in textiles, construction materials, paints, coatings, and others. It sells its products directly to end users and converters, as well as through agents, resellers, and distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.