Reviewing International Paper (NYSE:IP) and Smurfit Westrock (NYSE:SW)

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

Institutional & Insider Ownership

81.9% of International Paper shares are owned by institutional investors. Comparatively, 83.4% of Smurfit Westrock shares are owned by institutional investors. 0.4% of International Paper shares are owned by company insiders. Comparatively, 0.5% of Smurfit Westrock shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

International Paper has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, Smurfit Westrock has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Dividends

International Paper pays an annual dividend of $1.85 per share and has a dividend yield of 3.8%. Smurfit Westrock pays an annual dividend of $1.72 per share and has a dividend yield of 3.8%. International Paper pays out -1,850.0% of its earnings in the form of a dividend. Smurfit Westrock pays out 260.6% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
International Paper	-0.12%	2.63%	1.09%
Smurfit Westrock	1.14%	5.90%	2.36%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for International Paper and Smurfit Westrock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Paper	3	2	4	0	2.11
Smurfit Westrock	0	1	8	0	2.89

International Paper presently has a consensus price target of $55.4571, suggesting a potential upside of 13.32%. Smurfit Westrock has a consensus price target of $57.7778, suggesting a potential upside of 26.46%. Given Smurfit Westrock’s stronger consensus rating and higher possible upside, analysts plainly believe Smurfit Westrock is more favorable than International Paper.

Earnings and Valuation

This table compares International Paper and Smurfit Westrock”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Paper	$21.93 billion	1.18	$557.00 million	($0.10)	-489.40
Smurfit Westrock	$30.81 billion	0.77	$319.00 million	$0.66	69.22

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

Summary

Smurfit Westrock beats International Paper on 12 of the 16 factors compared between the two stocks.

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.

About Smurfit Westrock

Smurfit Westrock Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland and internationally. The company produces containerboard that it converts into corrugated containers or sells to third parties, as well as produces other types of paper, such as consumer packaging board, sack paper, graphic paper, solid board and graphic board, and other paper-based packaging products, such as consumer packaging, solid board packaging, paper sacks, and other packaging products, including bag-in-box. It also produces linerboard and corrugated medium, paperboard, and non-packaging grades of paper, as well as converted products, such as folding cartons and corrugated boxes, and other products; recycled paper-based packaging products; and packaging machinery. The company primarily serves food and beverage, e-commerce, retail, consumer goods, industrial, and foodservice markets. Smurfit Westrock Plc was founded in 1934 and is headquartered in Dublin, Ireland.