Head-To-Head Comparison: Smurfit Kappa Group (OTCMKTS:SMFTF) vs. Silgan (NYSE:SLGN)

Silgan (NYSE:SLGN) and Smurfit Kappa Group (OTCMKTS:SMFTF) are both materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Insider and Institutional Ownership

70.3% of Silgan shares are owned by institutional investors. Comparatively, 41.9% of Smurfit Kappa Group shares are owned by institutional investors. 1.1% of Silgan shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Silgan and Smurfit Kappa Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silgan	$6.48 billion	0.67	$288.40 million	$2.55	16.16
Smurfit Kappa Group	N/A	N/A	N/A	$1.19	38.02

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

Profitability

This table compares Silgan and Smurfit Kappa Group’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%
Smurfit Kappa Group	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings for Silgan and Smurfit Kappa Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silgan	0	3	8	1	2.83
Smurfit Kappa Group	0	0	0	0	0.00

Silgan currently has a consensus price target of $54.00, indicating a potential upside of 31.06%. Given Silgan’s stronger consensus rating and higher possible upside, analysts plainly believe Silgan is more favorable than Smurfit Kappa Group.

Dividends

Silgan pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Smurfit Kappa Group pays an annual dividend of $0.46 per share and has a dividend yield of 1.0%. Silgan pays out 32.9% of its earnings in the form of a dividend. Smurfit Kappa Group pays out 38.8% 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 raised its dividend for 22 consecutive years. Silgan is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Silgan beats Smurfit Kappa Group on 14 of the 15 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 Smurfit Kappa Group

Smurfit Kappa Group Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland, Germany, France, Mexico, rest of Europe, and other Americas. The company offers e-commerce, retail, consumer, industrial, bottle, protective, heavy-duty, hexacomb, and various punnet packaging products; composite cardboard tubes, bags, and sacks; and bag-in-box, a packaging system that comprises films, accessories, bags, taps, and boxes. It also provides point of sale displays; cardboards of social distancing; corrugated sheet boards, solid board sheets, folding carton sheet boards, sack Kraft papers, MG brown Kraft papers, preprint products, agro-papers, technical papers, BanaBag, and Catcher Board MB12; and various types of containerboards, such as kraftliners, testliners, and containerboard flutings. In addition, the company offers recycling solutions to cardboard and paper products; and supplies packaging machinery. It primarily serves consumer goods, industrial goods, and food and drink sectors. Smurfit Kappa Group Plc was founded in 1934 and is headquartered in Dublin, Ireland.