West Fraser Timber (NYSE:WFG – Get Free Report) and Suzano (NYSE:SUZ – Get Free Report) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.
Institutional and Insider Ownership
40.2% of West Fraser Timber shares are held by institutional investors. Comparatively, 2.5% of Suzano shares are held by institutional investors. 1.8% of West Fraser Timber shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares West Fraser Timber and Suzano”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| West Fraser Timber | $5.46 billion | 0.95 | -$937.00 million | ($15.44) | -4.30 |
| Suzano | $8.97 billion | 1.18 | $2.40 billion | $1.26 | 6.75 |
Suzano has higher revenue and earnings than West Fraser Timber. West Fraser Timber is trading at a lower price-to-earnings ratio than Suzano, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares West Fraser Timber and Suzano’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| West Fraser Timber | -22.98% | -10.84% | -8.19% |
| Suzano | 17.20% | 14.92% | 4.18% |
Analyst Ratings
This is a breakdown of current ratings and recommmendations for West Fraser Timber and Suzano, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| West Fraser Timber | 1 | 2 | 5 | 0 | 2.50 |
| Suzano | 2 | 0 | 2 | 0 | 2.00 |
West Fraser Timber presently has a consensus price target of $85.20, suggesting a potential upside of 28.31%. Suzano has a consensus price target of $13.20, suggesting a potential upside of 55.20%. Given Suzano’s higher probable upside, analysts plainly believe Suzano is more favorable than West Fraser Timber.
Volatility and Risk
West Fraser Timber has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Suzano has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.
Dividends
West Fraser Timber pays an annual dividend of $1.28 per share and has a dividend yield of 1.9%. Suzano pays an annual dividend of $0.18 per share and has a dividend yield of 2.1%. West Fraser Timber pays out -8.3% of its earnings in the form of a dividend. Suzano pays out 14.3% 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. West Fraser Timber has increased its dividend for 3 consecutive years.
Summary
Suzano beats West Fraser Timber on 10 of the 17 factors compared between the two stocks.
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.
About Suzano
Suzano S.A. produces and sells eucalyptus pulp and paper products in Brazil and internationally. It operates through Pulp and Paper segments. The company offers coated and uncoated printing and writing papers, paperboards, tissue papers, and market and fluff pulps; and lignin. It also engages in the research, development, and production of biofuel; operation of port terminals; power generation and distribution business; commercialization of equipment and parts; industrialization, commercialization, and exporting of pulp and standing wood; road freight transport; biotechnology research and development; and commercialization of paper and computer materials. In addition, the company is involved in the business office, production packaging, and financial fundraising activities; research, development, production, commercialization, and distribution of wood-based textile fibers, yarns, and filaments produced from cellulose and microfibrillated cellulose; and research and development of wood raw materials for the textile industry. Suzano S.A. was formerly known as Suzano Papel e Celulose S.A. and changed its name to Suzano S.A. in April 2019. The company was founded in 1924 and is headquartered in Salvador, Brazil.
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