Comparing Mercer International (NASDAQ:MERC) and Magnera (NYSE:MAGN)

Magnera (NYSE:MAGN) and Mercer International (NASDAQ:MERC) are both small-cap materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Valuation and Earnings

This table compares Magnera and Mercer International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnera	$3.20 billion	0.15	-$159.00 million	($1.96)	-6.74
Mercer International	$1.87 billion	0.02	-$497.89 million	($7.89)	-0.08

Magnera has higher revenue and earnings than Mercer International. Magnera is trading at a lower price-to-earnings ratio than Mercer International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

76.9% of Magnera shares are owned by institutional investors. Comparatively, 85.8% of Mercer International shares are owned by institutional investors. 1.0% of Magnera shares are owned by insiders. Comparatively, 1.2% of Mercer International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Magnera and Mercer International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnera	-3.37%	-10.30%	-2.77%
Mercer International	-28.51%	-136.20%	-13.64%

Analyst Ratings

This is a summary of current recommendations and price targets for Magnera and Mercer International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnera	1	2	0	0	1.67
Mercer International	4	2	0	0	1.33

Magnera presently has a consensus target price of $16.00, suggesting a potential upside of 21.07%. Mercer International has a consensus target price of $1.20, suggesting a potential upside of 89.87%. Given Mercer International’s higher probable upside, analysts clearly believe Mercer International is more favorable than Magnera.

Risk and Volatility

Magnera has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500. Comparatively, Mercer International has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Summary

Magnera beats Mercer International on 9 of the 13 factors compared between the two stocks.

About Magnera

Magnera’s purpose is to better the world with new possibilities made real. By continuously co-creating and innovating with our partners, we develop original material solutions that make a brighter future possible. With a breadth of technologies and a passion for what we create, Magnera’s solutions propel our customers’ goals forward and solve end-users’ problems, every day.

About Mercer International

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) and northern bleached hardwood kraft (NBHK) pulp worldwide. The company operates through two segments, Pulp and Solid Wood. It manufactures, sells, and distributes pulp, electricity, and chemicals through pulp mills. The company also manufactures, distributes, and sells lumber, cross-laminated timber, finger joint lumber, glue-laminated timber, wood pallets, electricity, biofuels, and wood residuals. In addition, it generates and sells green energy produced from biomass cogeneration power plant to third party. Further, it produces and sells NBSK pulp manufactured from softwood; green energy using carbon-neutral biofuels, such as black liquor and wood waste; tall oil from black liquor for use as a chemical additive and green energy source; bio extractives and biomaterials, including lignin, turpentine, cellulose filaments, and sandalwood oil; and biofuels; as well as provides transportation and logistics services. The company sells its pulp to pulp markets, integrated paper and paperboard manufacturers; and lumber products to distributors, construction firms, secondary manufacturers, retail yards, and home centers. Mercer International Inc. was founded in 1968 and is headquartered in Vancouver, Canada.