Critical Survey: Nature Wood Group (NASDAQ:NWGL) & West Fraser Timber (NYSE:WFG)

Nature Wood Group (NASDAQ:NWGL) and West Fraser Timber (NYSE:WFG) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Risk and Volatility

Nature Wood Group has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500. Comparatively, West Fraser Timber has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Nature Wood Group and West Fraser Timber’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nature Wood Group	N/A	N/A	N/A
West Fraser Timber	-4.35%	-2.63%	-2.06%

Analyst Recommendations

This is a summary of current ratings for Nature Wood Group and West Fraser Timber, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nature Wood Group	1	0	0	0	1.00
West Fraser Timber	2	3	3	0	2.13

West Fraser Timber has a consensus target price of $87.25, suggesting a potential upside of 43.79%. Given West Fraser Timber’s stronger consensus rating and higher possible upside, analysts plainly believe West Fraser Timber is more favorable than Nature Wood Group.

Valuation & Earnings

This table compares Nature Wood Group and West Fraser Timber”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nature Wood Group	$21.54 million	0.90	-$8.73 million	N/A	N/A
West Fraser Timber	$6.17 billion	0.75	-$5.00 million	($3.35)	-18.11

West Fraser Timber has higher revenue and earnings than Nature Wood Group.

Institutional & Insider Ownership

40.2% of West Fraser Timber shares are held by institutional investors. 1.8% of West Fraser Timber shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

West Fraser Timber beats Nature Wood Group on 7 of the 12 factors compared between the two stocks.

About Nature Wood Group

Nature Wood Group Limited, an integrated forestry company, engages in management and harvesting, and down-stream wood-processing and distribution activities. It operates in two divisions, Direct Purchase and Original Design Manufacturer Services; and Manufacturing segments. The company offers a range of products, including logs, decking and flooring products, sawn timber, recycled and synthesized charcoal, machine-made charcoal, and essential oils. It provides IT and business consultancy services. The company serves importers, retailers, and processors through its sales network in Europe, South Asia, South America, North America, and China. The company was formerly known as China Nature Wood Industry Group Limited and changed its name to Nature Wood Group Limited in September 2022. The company was incorporated in 2011 and is headquartered in Macau. Nature Wood Group Limited operates as a subsidiary of Easy Bliss Limited.

About West Fraser Timber

West Fraser Timber Co. Ltd., a diversified wood products company, engages in manufacturing, selling, marketing, and distributing lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals and renewable energy. It offers spruce-pine-fir, douglas fir-larch, hem-fir, and southern yellow pine lumber, treated wood products, medium density fiberboard panels and plywood, oriented strand board, and laminated veneer lumber wood products, as well as particleboards. The company also provides northern bleached softwood Kraft pulp and bleached chemical thermo-mechanical pulp used to produce various paper products, including printing and writing papers, paperboard products, tissue and towel products, and a variety of other paper grades. Further, it offers bioproducts, including bioenergy and biomaterial. Its products are used in home construction, repair and remodeling, papers, tissue, and box materials, and industrial applications. The company sells its products to major retail chains, contractor supply yards, and wholesalers, as well as industrial customers for further processing or as components for other products in Canada, the United States, the United Kingdom, Europe, and internationally. West Fraser Timber Co. Ltd. was founded in 1955 and is headquartered in Vancouver, Canada.