Critical Survey: CCL Industries (OTCMKTS:CCDBF) & Avery Dennison (NYSE:AVY)

CCL Industries (OTCMKTS:CCDBF) and Avery Dennison (NYSE:AVY) are both large-cap materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

CCL Industries pays an annual dividend of $1.04 per share and has a dividend yield of 1.6%. Avery Dennison pays an annual dividend of $4.00 per share and has a dividend yield of 2.3%. CCL Industries pays out 40.2% of its earnings in the form of a dividend. Avery Dennison pays out 43.8% 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. Avery Dennison has increased its dividend for 15 consecutive years. Avery Dennison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares CCL Industries and Avery Dennison’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CCL Industries	10.27%	14.75%	7.89%
Avery Dennison	7.62%	34.60%	8.76%

Earnings & Valuation

This table compares CCL Industries and Avery Dennison”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CCL Industries	$5.48 billion	1.92	$574.28 million	$2.59	25.89
Avery Dennison	$8.86 billion	1.46	$688.00 million	$9.13	18.70

Avery Dennison has higher revenue and earnings than CCL Industries. Avery Dennison is trading at a lower price-to-earnings ratio than CCL Industries, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.2% of Avery Dennison shares are owned by institutional investors. 0.8% of Avery Dennison shares are owned by 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CCL Industries and Avery Dennison, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CCL Industries	0	1	4	0	2.80
Avery Dennison	0	3	7	0	2.70

Avery Dennison has a consensus price target of $199.20, suggesting a potential upside of 16.67%. Given Avery Dennison’s higher possible upside, analysts clearly believe Avery Dennison is more favorable than CCL Industries.

Summary

Avery Dennison beats CCL Industries on 11 of the 16 factors compared between the two stocks.

About CCL Industries

CCL Industries Inc. manufactures and sells labels, consumer printable media products, technology-driven label solutions, polymer banknote substrates, and specialty films. It operates through CCL, Avery, Checkpoint, and Innovia segments. The CCL segment converts pressure sensitive and extruded film materials for a range of decorative, instructional, security, and functional applications for government institutions and global customers in consumer packaging, healthcare, chemicals, consumer durables, electronic device, and automotive markets. The Avery segment supplies labels, specialty converted media, and software solutions to enable short-run digital printing in businesses and homes alongside complementary products sold through distributors, mass-market stores, and e-commerce retailers. The Checkpoint segment engages in developing radio frequency and radio frequency identification-based technology systems for loss prevention and inventory management applications, including labeling and tagging solutions for the retail and apparel industries. The Innovia segment supplies biaxially oriented polypropylene films to customers in the pressure sensitive label materials, flexible packaging, and consumer packaged goods industries. The company operates in Canada, the United States, Puerto Rico, Mexico, Brazil, Chile, Argentina, Europe, Asia, Australia, Africa, and New Zealand. CCL Industries Inc. was founded in 1951 and is headquartered in Toronto, Canada.

About Avery Dennison

Avery Dennison Corporation operates as a materials science and digital identification solutions company in the United States, Europe, the Middle East, North Africa, Asia, Latin, America, and internationally. It provides pressure-sensitive materials comprising papers, plastic films, metal foils, and fabrics; performance tapes products, including tapes for wire harnessing, as well as cable wrapping for automotive, electrical, and general industrial applications; mechanical fasteners, which are precision-extruded and injection-molded plastic devices used in various automotive, general industrial, and retail applications; and other pressure-sensitive adhesive-based materials and converted products under the Fasson, JAC, Yongle, and Avery Dennison brands. The company also offers graphics and reflective products for the architectural, commercial sign, digital printing, and other related market segments; durable cast and reflective films to the construction, automotive, and fleet transportation market segments; reflective films for traffic and safety applications; and pressure-sensitive vinyl and specialty materials designed for digital imaging, screen printing, and sign cutting applications under the Avery Dennison and Mactac brand names. In addition, it provides branding solutions include brand embellishments, graphic tickets, tags, and labels, and sustainable packaging; and information solutions include item-level RFID, visibility and loss prevention, price ticketing and marking, productivity and media solutions, and brand protection and security solutions, as well as care, content, and country of origin compliance solutions. It serves home and personal care, apparel, e-commerce, logistics, food and grocery, pharmaceuticals, and automotive industries. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990. Avery Dennison Corporation was founded in 1935 and is headquartered in Mentor, Ohio.