Reviewing Sappi (OTCMKTS:SPPJY) & Magnera (NYSE:MAGN)

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

Profitability

This table compares Magnera and Sappi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnera	-3.41%	-10.77%	-2.87%
Sappi	-15.44%	-6.41%	-2.30%

Volatility and Risk

Magnera has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500. Comparatively, Sappi has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Magnera and Sappi, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnera	1	2	0	0	1.67
Sappi	0	1	0	0	2.00

Magnera currently has a consensus price target of $16.00, indicating a potential upside of 36.61%. Given Magnera’s higher possible upside, research analysts plainly believe Magnera is more favorable than Sappi.

Insider and Institutional Ownership

76.9% of Magnera shares are owned by institutional investors. 1.0% of Magnera shares are owned by insiders. Comparatively, 0.7% of Sappi shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Magnera and Sappi”s top-line revenue, earnings per share 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)	-5.83
Sappi	$5.42 billion	0.09	-$177.00 million	($1.36)	-0.62

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

Summary

Magnera beats Sappi on 7 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 Sappi

Sappi Limited, together with its subsidiaries, engages in the provision of materials made from woodfiber-based renewable resources in Europe, North America, and South Africa. The company manufacture and sells dissolving pulp, and wood and paper pulp; graphic papers, coated and uncoated papers, and casting and release papers; and packaging and specialty papers, including packaging and specialty papers, including flexible packaging papers, label papers, functional paper packaging products, containerboards, paperboards, silicone base papers, and dye sublimation papers. It also provides biomaterials, such as valida, lignin, furfural, and sweeteners, as well as forestry products; and engages in the treasury and insurance business. The company was founded in 1936 and is headquartered in Johannesburg, South Africa.