Critical Review: Suzano (NYSE:SUZ) & Lee & Man Paper Manufacturing (OTCMKTS:LMPMF)

Lee & Man Paper Manufacturing (OTCMKTS:LMPMF) and Suzano (NYSE:SUZ) are both materials companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Lee & Man Paper Manufacturing and Suzano, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lee & Man Paper Manufacturing	0	0	0	0	0.00
Suzano	0	2	1	1	2.75

Suzano has a consensus target price of $12.20, indicating a potential upside of 45.85%. Given Suzano’s stronger consensus rating and higher possible upside, analysts plainly believe Suzano is more favorable than Lee & Man Paper Manufacturing.

Earnings and Valuation

This table compares Lee & Man Paper Manufacturing and Suzano”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lee & Man Paper Manufacturing	N/A	N/A	N/A	$0.40	1.04
Suzano	$8.97 billion	1.16	$2.40 billion	$1.68	4.98

Suzano has higher revenue and earnings than Lee & Man Paper Manufacturing. Lee & Man Paper Manufacturing is trading at a lower price-to-earnings ratio than Suzano, indicating that it is currently the more affordable of the two stocks.

Dividends

Lee & Man Paper Manufacturing pays an annual dividend of $0.15 per share and has a dividend yield of 34.8%. Suzano pays an annual dividend of $0.18 per share and has a dividend yield of 2.2%. Lee & Man Paper Manufacturing pays out 36.3% of its earnings in the form of a dividend. Suzano pays out 10.7% 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.

Institutional & Insider Ownership

14.2% of Lee & Man Paper Manufacturing shares are held by institutional investors. Comparatively, 2.5% of Suzano shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Lee & Man Paper Manufacturing and Suzano’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lee & Man Paper Manufacturing	N/A	N/A	N/A
Suzano	22.90%	25.25%	6.94%

Summary

Suzano beats Lee & Man Paper Manufacturing on 11 of the 13 factors compared between the two stocks.

About Lee & Man Paper Manufacturing

Lee & Man Paper Manufacturing Limited, an investment holding company, engages in the manufacture and trading of packaging papers, pulps, and tissue papers in the People's Republic of China, Vietnam, Malaysia, Macau, and Hong Kong. The company operates through Packaging Paper, Tissue Paper, and Pulp segments. It offers various pulp products, such as dissolved pulps for use in viscose chemical fibers, bamboo fibers, glass papers, acetate fibers, refined rayons, etc.; unbleached bamboo kraft pulps for use in ecru life papers, environmental table wares, food bags, etc.; and bleached bamboo kraft pulps for use in tissue papers, fine papers, cigarette papers, cup papers, etc. The company also provides containerboard products, including kraft and test linerboards for use in cartons, graphic carton, paper bags, file boxes, paperboards, wall papers, etc.; and corrugating liners for use in corrugated layer and septi-layer of paperboards, and honeycomb-like products. In addition, it offers coated duplex board products for use in graphic cartons, color card printing, and offset printing, as well as in packaging of commodities, household appliances, IT products, medicine/health care products, food products, toys, gifts, ceramic products, stationery products, beverages, etc.; toilet rolls; and unbleached paper for use in various applications, such as baby care, menstruation, facial, sensitive skin, table, kitchen, etc. Lee & Man Paper Manufacturing Limited was founded in 1994 and is headquartered in North Point, Hong Kong.

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.