Earnings & Valuation
Fibria (NYSE: FBR) and Domtar (NYSE:UFS) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.
This table compares Fibria and Domtar’s top-line revenue, earnings per share and valuation.
Fibria has higher earnings, but lower revenue than Domtar. Domtar is trading at a lower price-to-earnings ratio than Fibria, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and recommmendations for Fibria and Domtar, as reported by MarketBeat.
Fibria presently has a consensus price target of $16.25, indicating a potential downside of 15.41%. Domtar has a consensus price target of $43.82, indicating a potential downside of 3.29%. Given Domtar’s stronger consensus rating and higher probable upside, analysts clearly believe Domtar is more favorable than Fibria.
This table compares Fibria and Domtar’s net margins, return on equity and return on assets.
Insider & Institutional Ownership
7.3% of Fibria shares are owned by institutional investors. Comparatively, 94.9% of Domtar shares are owned by institutional investors. 40.2% of Fibria shares are owned by company insiders. Comparatively, 1.0% of Domtar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
Fibria has a beta of -0.1, meaning that its share price is 110% less volatile than the S&P 500. Comparatively, Domtar has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.
Fibria pays an annual dividend of $0.12 per share and has a dividend yield of 0.6%. Domtar pays an annual dividend of $1.74 per share and has a dividend yield of 3.8%. Fibria pays out 19.7% of its earnings in the form of a dividend. Domtar pays out 66.9% 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. Domtar has increased its dividend for 8 consecutive years. Domtar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Domtar beats Fibria on 10 of the 17 factors compared between the two stocks.
Fibria Celulose S.A. produces, sells, and exports short fiber pulp in Brazil and internationally. It manufactures and sells bleached eucalyptus kraft pulp. The company has approximately 1,056,000 hectares of forest base in the states of São Paulo, Minas Gerais, Rio de Janeiro, Espírito Santo, Mato Grosso do Sul, and Bahia. It also exports its products to approximately 35 countries for educational, health, hygiene, and cleaning products. The company was formerly known as Votorantim Celulose e Papel S.A. and changed its name to Fibria Celulose S.A. in November 2009. Fibria Celulose S.A. was founded in 1988 and is headquartered in São Paulo, Brazil.
Domtar Corporation designs, manufactures, markets, and distributes various communication papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, and internationally. It operates in two segments, Pulp and Paper, and Personal Care. The company offers business papers, including copy and electronic imaging papers for use with inkjet and laser printers, photocopiers, and plain-paper fax machines, as well as computer papers, preprinted forms, and digital papers for office and home use. It also provides commercial printing and publishing papers, such as offset papers and opaques for sheet and roll fed offset presses; publishing papers comprising tradebook and lightweight uncoated papers for publishing textbooks, dictionaries, catalogs, magazines, hard cover novels, and financial documents; and base papers that are converted into envelopes, tablets, business forms, and data processing/computer forms. In addition, the company offers papers for thermal and flexible packaging, food and medical packaging, medical gowns and drapes, sandpaper backing, carbonless printing, label, and other coating and laminating applications; and papers for industrial and specialty applications that include carrier and treated papers, security papers, and specialized printing and converting applications. Further, it provides softwood, fluff, and hardwood Kraft products for various end products. Additionally, the company offers absorbent hygiene products, which comprise adult incontinence products under the Attends, IncoPack, Indasec, and Reassure brand; and branded and private label briefs, protective underwear, underpads, pads, and washcloths, as well as baby diapers, youth pants, and infant training pants for healthcare, retail, and direct-to-consumer channels. It serves merchants, retail outlets, stationers, printers, publishers, converters, and end-users. The company was incorporated in 2006 and is based in Fort Mill, South Carolina.