Reviewing Graphic Packaging (NYSE:GPK) and Silgan (NYSE:SLGN)

Silgan (NYSE:SLGN) and Graphic Packaging (NYSE:GPK) are both mid-cap materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Risk and Volatility

Silgan has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Graphic Packaging has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Dividends

Silgan pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Graphic Packaging pays an annual dividend of $0.44 per share and has a dividend yield of 3.9%. Silgan pays out 32.9% of its earnings in the form of a dividend. Graphic Packaging pays out 66.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Silgan has increased its dividend for 22 consecutive years and Graphic Packaging has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Silgan and Graphic Packaging, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silgan	0	3	8	1	2.83
Graphic Packaging	3	9	0	0	1.75

Silgan currently has a consensus target price of $54.00, indicating a potential upside of 27.28%. Graphic Packaging has a consensus target price of $11.14, indicating a potential downside of 2.25%. Given Silgan’s stronger consensus rating and higher possible upside, research analysts clearly believe Silgan is more favorable than Graphic Packaging.

Institutional and Insider Ownership

70.3% of Silgan shares are owned by institutional investors. Comparatively, 99.7% of Graphic Packaging shares are owned by institutional investors. 1.1% of Silgan shares are owned by company insiders. Comparatively, 1.5% of Graphic Packaging shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Silgan and Graphic Packaging’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Silgan	4.05%	16.74%	4.09%
Graphic Packaging	2.25%	9.95%	2.77%

Earnings & Valuation

This table compares Silgan and Graphic Packaging”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silgan	$6.48 billion	0.69	$288.40 million	$2.55	16.64
Graphic Packaging	$8.62 billion	0.39	$444.00 million	$0.66	17.27

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

Summary

Silgan beats Graphic Packaging on 12 of the 18 factors compared between the two stocks.

About Silgan

Silgan Holdings Inc., together with its subsidiaries, manufactures and sells rigid packaging solutions for consumer goods products in the United States and internationally. It operates through three segments: Dispensing and Specialty Closures, Metal Containers, and Custom Containers. The Dispensing and Specialty Closures segment offers a range of metal and plastic closures, and dispensing systems for food, beverage, health care, garden, home, personal care, beauty products, and hard surface cleaning products, as well as capping/sealing equipment and detection systems. The Metal Containers segment manufactures and sells steel and aluminum containers for food products, such as pet food, vegetables, soups, proteins, fruits, and other miscellaneous food products, as well as general line metal containers primarily for chemicals. The Custom Containers segment manufactures and sells custom designed and stock plastic containers for use in personal care and health care; food and beverage; household and industrial chemical; pharmaceutical; pet food and care; agricultural; automotive. This segment also provides thermoformed barrier and non-barrier bowls, and trays for food products, such as soups, other ready-to-eat meals, and pet food products; and plastic closures, caps, sifters, and fitments, as well as thermoformed tubs for food, household, and personal care products. The company markets its products primarily through direct sales force, as well as through a network of distributors, and an online shopping catalog. The company was founded in 1987 and is headquartered in Stamford, Connecticut.

About Graphic Packaging

Graphic Packaging Holding Company, together with its subsidiaries, designs, produces, and sells consumer packaging products to brands in food, beverage, foodservice, household, and other consumer products. It operates through three segments: Paperboard Manufacturing, Americas Paperboard Packaging, and Europe Paperboard Packaging. The company offers unbleached, bleached, and recycled paperboard to various paperboard packaging converters and brokers. It also provides paperboard packaging products for consumer packaged goods companies; and cups, lids, and food containers for foodservice companies and quick-service restaurants serving the food, beverage, and consumer product markets, including healthcare and beauty. The company also designs, manufactures, and installs specialized packaging machines. The company sells its products through sales offices, as well as through broker arrangements with third parties in the Americas, Europe, and the Asia Pacific. Graphic Packaging Holding Company was incorporated in 2007 and is headquartered in Atlanta, Georgia.