Cameco (NYSE:CCJ) and International Paper (NYSE:IP) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.
Volatility & Risk
Cameco has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, International Paper has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations for Cameco and International Paper, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Cameco | 1 | 3 | 4 | 0 | 2.38 |
International Paper | 3 | 3 | 8 | 0 | 2.36 |
Cameco presently has a consensus price target of $20.40, indicating a potential upside of 26.24%. International Paper has a consensus price target of $47.8889, indicating a potential downside of 5.73%. Given Cameco's stronger consensus rating and higher possible upside, research analysts clearly believe Cameco is more favorable than International Paper.
Earnings and Valuation
This table compares Cameco and International Paper's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Cameco | $1.40 billion | 4.57 | $55.77 million | $0.08 | 202.00 |
International Paper | $22.38 billion | 0.89 | $1.23 billion | $4.43 | 11.47 |
International Paper has higher revenue and earnings than Cameco. International Paper is trading at a lower price-to-earnings ratio than Cameco, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
60.2% of Cameco shares are held by institutional investors. Comparatively, 81.6% of International Paper shares are held by institutional investors. 1.0% of Cameco shares are held by insiders. Comparatively, 0.4% of International Paper shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Dividends
Cameco pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. International Paper pays an annual dividend of $2.05 per share and has a dividend yield of 4.0%. Cameco pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. International Paper pays out 46.3% of its earnings in the form of a dividend. International Paper has raised its dividend for 1 consecutive years. International Paper is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Cameco and International Paper's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Cameco | -0.09% | -0.34% | -0.23% |
International Paper | 2.37% | 17.27% | 3.79% |
Summary
International Paper beats Cameco on 13 of the 17 factors compared between the two stocks.