International Paper (NYSE:IP) vs. Ranpak (NYSE:PACK) Critical Contrast

Ranpak (NYSE:PACK) and International Paper (NYSE:IP) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Risk & Volatility

Ranpak has a beta of 3.11, indicating that its stock price is 211% more volatile than the S&P 500. Comparatively, International Paper has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ranpak and International Paper, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranpak	1	1	2	0	2.25
International Paper	1	3	10	0	2.64

Ranpak currently has a consensus target price of $3.50, suggesting a potential upside of 8.86%. International Paper has a consensus target price of $45.44, suggesting a potential upside of 22.83%. Given International Paper’s stronger consensus rating and higher possible upside, analysts plainly believe International Paper is more favorable than Ranpak.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ranpak	-8.28%	-6.61%	-3.14%
International Paper	-14.32%	1.77%	0.69%

Earnings & Valuation

This table compares Ranpak and International Paper”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranpak	$395.00 million	0.70	-$38.30 million	($0.40)	-8.04
International Paper	$23.63 billion	0.83	-$3.52 billion	($6.56)	-5.64

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

Insider and Institutional Ownership

85.9% of Ranpak shares are held by institutional investors. Comparatively, 82.0% of International Paper shares are held by institutional investors. 8.8% of Ranpak shares are held by company insiders. Comparatively, 0.2% of International Paper shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

International Paper beats Ranpak on 8 of the 14 factors compared between the two stocks.

About Ranpak

Ranpak Holdings Corp., together with its subsidiaries, provides product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains in North America, Europe, and Asia. The company offers protective packaging solutions, such as void-fill protective systems that convert paper to fill empty spaces in secondary packages and protect objects under the FillPak brand; cushioning protective systems, which convert paper into cushioning pads under the PadPak brand; and wrapping protective systems that create pads or paper mesh to wrap and protect fragile items, as well as to line boxes and provide separation when shipping various objects under the WrapPak, Geami, and ReadyRoll brands, as well as cold chain products, which are used to provide insulation for goods. It also offers end-of-line packaging automation products, which help end users automate the void filling and box closure processes after product packing is complete. The company sells its products to end users primarily through a distributor network, and directly to select end-users. Ranpak Holdings Corp. was founded in 1972 and is headquartered in Concord Township, Ohio.

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.