Head-To-Head Survey: Norbord (OSB) vs. Enviva Partners (EVA)

Norbord (NYSE: OSB) and Enviva Partners (NYSE:EVA) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Valuation and Earnings

This table compares Norbord and Enviva Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Norbord $2.18 billion 1.63 $436.00 million $4.49 9.12
Enviva Partners $543.22 million 1.45 $17.51 million $0.61 49.02

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Norbord and Enviva Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Norbord 2 5 1 0 1.88
Enviva Partners 0 0 2 0 3.00

Norbord presently has a consensus target price of $42.00, suggesting a potential upside of 2.54%. Enviva Partners has a consensus target price of $33.50, suggesting a potential upside of 12.04%. Given Enviva Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Enviva Partners is more favorable than Norbord.

Dividends

Norbord pays an annual dividend of $1.87 per share and has a dividend yield of 4.6%. Enviva Partners pays an annual dividend of $2.50 per share and has a dividend yield of 8.4%. Norbord pays out 41.6% of its earnings in the form of a dividend. Enviva Partners pays out 409.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enviva Partners has raised its dividend for 2 consecutive years. Enviva Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Norbord has a beta of 2.57, indicating that its stock price is 157% more volatile than the S&P 500. Comparatively, Enviva Partners has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Institutional and Insider Ownership

78.8% of Norbord shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Norbord and Enviva Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Norbord 21.08% 45.94% 21.96%
Enviva Partners -0.24% 7.71% 2.53%

Summary

Norbord beats Enviva Partners on 10 of the 16 factors compared between the two stocks.

Norbord Company Profile

Norbord Inc. manufactures and sells wood-based panels for retail chains, contractor supply yards, and industrial manufacturers primarily in North America and Europe. The company offers oriented strand boards for use in sheathing, flooring, and roofing in home construction applications; particleboards that are used in flooring and other construction applications; and medium density fiberboards for use in cabinet doors, mouldings, and interior wall paneling applications, as well as related value-added products for use in the construction of new homes, and renovation and repair of existing structures. It markets its products under the Durastrand pointSIX, Pinnacle, Stabledge, TruFlor pointSIX and TruFlor, SteadiTred, QuakeZone, Tallwall, Trubord and Windstorm, SolarBord, TruDeck, StableDec, SterlingOSB, Caberwood, MDF, and Conti and Caberboard brands. The company was formerly known as Nexfor Inc. and changed its name to Norbord Inc. in June 2004. Norbord Inc. was founded in 1987 and is headquartered in Toronto, Canada.

Enviva Partners Company Profile

Enviva Partners, LP is a supplier of utility-grade wood pellets to power generators. The Company procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-water marine terminals, where they are received, stored and loaded onto oceangoing vessels for transport to the Company’s principally Northern European customers. The Company’s principal product, utility-grade wood pellets, is a traded energy commodity that is used as a substitute for coal in both dedicated and co-fired power generation and combined heat and power plants. It enables power generators to generate electricity. The Company’s customers use its wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets are exported from the Company’s deep-water marine terminal in Chesapeake, Virginia, from a deep-water marine terminal in Wilmington, North Carolina.

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