| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 111.76 | 423 |
| Intrinsic value (DCF) | 0.00 | -100 |
| Graham-Dodd Method | 106.51 | 399 |
| Graham Formula | n/a |
Clearwater Paper Corporation (NYSE: CLW) is a leading manufacturer of bleached paperboard and tissue products, serving both domestic and international markets. Headquartered in Spokane, Washington, the company operates through two key segments: Pulp and Paperboard, and Consumer Products. The Pulp and Paperboard segment produces high-quality paperboard used in packaging applications such as folding cartons, liquid packaging, and commercial printing, catering to converters and merchants. The Consumer Products segment offers a wide range of at-home and away-from-home tissue products, including bath tissues, paper towels, and facial tissues, distributed through major retail channels. With a strong focus on sustainability and operational efficiency, Clearwater Paper is well-positioned in the competitive paper and forest products industry. The company’s vertically integrated model ensures cost control and supply chain resilience, making it a key player in the basic materials sector.
Clearwater Paper presents a mixed investment profile. On the positive side, the company benefits from stable demand for paperboard and tissue products, supported by its vertically integrated operations and strong market positioning. Its net income of $196.3 million and diluted EPS of $11.7 in the latest fiscal year reflect solid profitability. However, the lack of dividends may deter income-focused investors, and the capital-intensive nature of the industry requires ongoing high expenditures, as seen in the $116.6 million capital outlay. The company’s low beta (0.161) suggests lower volatility compared to the broader market, which could appeal to risk-averse investors. Key risks include exposure to fluctuating raw material costs and competitive pressures in the consumer products segment.
Clearwater Paper’s competitive advantage lies in its vertically integrated operations, which allow for cost efficiencies and supply chain control. The company’s Pulp and Paperboard segment serves a niche market with specialized products like liquid packaging and folding cartons, differentiating it from commoditized paper producers. In the Consumer Products segment, Clearwater competes with larger players by focusing on private-label and value-grade tissue products, which are distributed through major retail channels. However, the company faces stiff competition from well-capitalized rivals with broader product portfolios and stronger brand recognition. Its relatively small market cap (~$470 million) limits its ability to scale as aggressively as larger competitors. The lack of a dividend further reduces its attractiveness compared to peers that offer shareholder returns. Clearwater’s low debt levels ($293.3 million) provide financial flexibility, but its capital expenditures remain high, which could strain cash flows in a downturn.