Financial Review: International Paper (NYSE:IP) and Mayr-Melnhof Karton (OTCMKTS:MNHFF)

Mayr-Melnhof Karton (OTCMKTS:MNHFF) and International Paper (NYSE:IP) are both materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Dividends

Mayr-Melnhof Karton pays an annual dividend of $2.40 per share and has a dividend yield of 2.6%. International Paper pays an annual dividend of $1.85 per share and has a dividend yield of 4.9%. Mayr-Melnhof Karton pays out 37.8% of its earnings in the form of a dividend. International Paper pays out -28.4% 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. International Paper is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Mayr-Melnhof Karton and International Paper, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mayr-Melnhof Karton	0	0	0	0	0.00
International Paper	1	4	9	0	2.57

International Paper has a consensus target price of $48.75, indicating a potential upside of 30.41%. Given International Paper’s stronger consensus rating and higher possible upside, analysts clearly believe International Paper is more favorable than Mayr-Melnhof Karton.

Profitability

This table compares Mayr-Melnhof Karton and International Paper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mayr-Melnhof Karton	N/A	N/A	N/A
International Paper	-14.20%	-1.09%	-0.44%

Earnings and Valuation

This table compares Mayr-Melnhof Karton 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
Mayr-Melnhof Karton	N/A	N/A	N/A	$6.35	14.59
International Paper	$23.63 billion	0.84	-$3.52 billion	($6.52)	-5.73

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

Institutional and Insider Ownership

82.0% of International Paper shares are owned by institutional investors. 0.2% of International Paper shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

International Paper beats Mayr-Melnhof Karton on 8 of the 13 factors compared between the two stocks.

About Mayr-Melnhof Karton

Mayr-Melnhof Karton AG manufactures and sells cartonboard and folding cartons in Germany, Austria, and internationally. It operates through two segments, MM Board & Paper and MM Packaging. The MM Board & Paper segment manufactures and markets various grades of cartonboard products, such as coated cartonboard produced from recycling fibers; and virgin fiber based cartonboard, as well as offers kraft papers and uncoated fine papers. This segment primarily serves printing businesses in the fragmented folding carton industry. The MM Packaging segment processes cartonboard into folding cartons primarily for food industry, as well as for other consumer goods industries. This segment also provides leaflets and labels. Mayr-Melnhof Karton AG was founded in 1950 and is based in Vienna, Austria.

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.