KapStone Paper and Packaging Corporation (NYSE: KS) and Westrock (NYSE:WRK) are both mid-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.
Risk & Volatility
KapStone Paper and Packaging Corporation has a beta of 2.84, suggesting that its share price is 184% more volatile than the S&P 500. Comparatively, Westrock has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.
Profitability
This table compares KapStone Paper and Packaging Corporation and Westrock’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KapStone Paper and Packaging Corporation | 2.39% | 11.26% | 3.10% |
| Westrock | 2.92% | 6.38% | 2.68% |
Analyst Recommendations
This is a breakdown of current recommendations and price targets for KapStone Paper and Packaging Corporation and Westrock, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KapStone Paper and Packaging Corporation | 0 | 6 | 5 | 0 | 2.45 |
| Westrock | 0 | 2 | 8 | 1 | 2.91 |
KapStone Paper and Packaging Corporation currently has a consensus price target of $26.60, indicating a potential upside of 21.52%. Westrock has a consensus price target of $62.22, indicating a potential upside of 10.50%. Given KapStone Paper and Packaging Corporation’s higher possible upside, equities research analysts plainly believe KapStone Paper and Packaging Corporation is more favorable than Westrock.
Insider and Institutional Ownership
81.2% of KapStone Paper and Packaging Corporation shares are held by institutional investors. Comparatively, 89.9% of Westrock shares are held by institutional investors. 13.3% of KapStone Paper and Packaging Corporation shares are held by company insiders. Comparatively, 2.7% of Westrock shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares KapStone Paper and Packaging Corporation and Westrock’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| KapStone Paper and Packaging Corporation | $3.14 billion | 0.68 | $346.91 million | $0.77 | 28.43 |
| Westrock | $14.41 billion | 0.98 | $2.12 billion | $1.64 | 34.34 |
Westrock has higher revenue and earnings than KapStone Paper and Packaging Corporation. KapStone Paper and Packaging Corporation is trading at a lower price-to-earnings ratio than Westrock, indicating that it is currently the more affordable of the two stocks.
Dividends
KapStone Paper and Packaging Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Westrock pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. KapStone Paper and Packaging Corporation pays out 51.9% of its earnings in the form of a dividend. Westrock pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
Westrock beats KapStone Paper and Packaging Corporation on 11 of the 17 factors compared between the two stocks.
About KapStone Paper and Packaging Corporation
KapStone Paper and Packaging Corporation is a producer of containerboard and the kraft paper in North America. The Company operates through two segments: Paper and Packaging, and Distribution. The Paper and Packaging segment manufactures and sells a range of containerboard, corrugated products and specialty paper for industrial and consumer markets. The Distribution segment, which operates under the Victory and Golden State Container trade names, provides its customers packaging solutions and services and distributes corrugated packaging materials and other specialty packaging products, which include stretch film, void fill, carton sealing tape and other specialty tapes. The Company produces a range of products ranging from basic corrugated shipping containers to specialized packaging. The Company also produces packaging for fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.
About Westrock
WestRock Company, incorporated on March 6, 2015, is a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. The Company also develops real estate in the Charleston, South Carolina region. The Company’s segments include Corrugated Packaging, Consumer Packaging, and Land and Development. The Corrugated Packaging segment consists of its containerboard mill and corrugated packaging operations, as well as its recycling operations. The Consumer Packaging segment consists of consumer mills, folding carton, beverage, merchandising displays, and partition operations. The Land and Development segment is engaged in the development and sale of real estate primarily in Charleston, South Carolina.
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