Reviewing Ranpak (NYSE:PACK) & Packaging Corporation of America (NYSE:PKG)

Packaging Corporation of America (NYSE:PKG) and Ranpak (NYSE:PACK) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Profitability

This table compares Packaging Corporation of America and Ranpak’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Packaging Corporation of America	7.40%	19.63%	8.36%
Ranpak	-8.28%	-6.65%	-3.15%

Risk & Volatility

Packaging Corporation of America has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Ranpak has a beta of 3.11, indicating that its stock price is 211% more volatile than the S&P 500.

Insider & Institutional Ownership

89.8% of Packaging Corporation of America shares are owned by institutional investors. Comparatively, 85.9% of Ranpak shares are owned by institutional investors. 1.6% of Packaging Corporation of America shares are owned by company insiders. Comparatively, 8.8% of Ranpak shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Packaging Corporation of America and Ranpak, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Packaging Corporation of America	0	3	6	1	2.80
Ranpak	1	1	2	0	2.25

Packaging Corporation of America presently has a consensus target price of $275.43, suggesting a potential upside of 6.21%. Ranpak has a consensus target price of $3.50, suggesting a potential upside of 4.01%. Given Packaging Corporation of America’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Packaging Corporation of America is more favorable than Ranpak.

Earnings & Valuation

This table compares Packaging Corporation of America and Ranpak”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Packaging Corporation of America	$8.99 billion	2.57	$774.10 million	$8.12	31.94
Ranpak	$395.00 million	0.73	-$38.30 million	($0.40)	-8.41

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

Summary

Packaging Corporation of America beats Ranpak on 13 of the 15 factors compared between the two stocks.

About Packaging Corporation of America

Packaging Corporation of America engages in the production of container products. It operates through the following segments: Packaging, Paper, and Corporate and Other. The Packaging segment offers a variety of corrugated packaging products, such as conventional shipping containers. The Paper segment manufactures and sells a range of papers, including communication-based papers, and pressure sensitive papers. The Corporate and Other segment focuses on transportation assets, such as rail cars, and trucks. The company was founded in 1959 and is headquartered in Lake Forest, IL.

About Ranpak

Ranpak Holdings Corp., together with its subsidiaries, provides product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains in North America, Europe, and Asia. The company offers protective packaging solutions, such as void-fill protective systems that convert paper to fill empty spaces in secondary packages and protect objects under the FillPak brand; cushioning protective systems, which convert paper into cushioning pads under the PadPak brand; and wrapping protective systems that create pads or paper mesh to wrap and protect fragile items, as well as to line boxes and provide separation when shipping various objects under the WrapPak, Geami, and ReadyRoll brands, as well as cold chain products, which are used to provide insulation for goods. It also offers end-of-line packaging automation products, which help end users automate the void filling and box closure processes after product packing is complete. The company sells its products to end users primarily through a distributor network, and directly to select end-users. Ranpak Holdings Corp. was founded in 1972 and is headquartered in Concord Township, Ohio.