Head to Head Analysis: Silgan (NYSE:SLGN) and Packaging Corporation of America (NYSE:PKG)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Silgan	3.90%	16.73%	4.19%
Packaging Corporation of America	7.40%	19.63%	8.36%

Dividends

Silgan pays an annual dividend of $0.84 per share and has a dividend yield of 2.1%. Packaging Corporation of America pays an annual dividend of $6.00 per share and has a dividend yield of 2.3%. Silgan pays out 33.9% of its earnings in the form of a dividend. Packaging Corporation of America pays out 73.9% 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Silgan and Packaging Corporation of America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silgan	0	3	8	1	2.83
Packaging Corporation of America	0	3	6	1	2.80

Silgan currently has a consensus target price of $50.60, indicating a potential upside of 24.91%. Packaging Corporation of America has a consensus target price of $275.43, indicating a potential upside of 7.11%. Given Silgan’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Silgan is more favorable than Packaging Corporation of America.

Risk and Volatility

Silgan has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Packaging Corporation of America has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares Silgan and Packaging Corporation of America”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	0.66	$288.40 million	$2.48	16.33
Packaging Corporation of America	$8.99 billion	2.55	$774.10 million	$8.12	31.67

Packaging Corporation of America has higher revenue and earnings than Silgan. Silgan 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.

Institutional & Insider Ownership

70.3% of Silgan shares are owned by institutional investors. Comparatively, 89.8% of Packaging Corporation of America shares are owned by institutional investors. 1.1% of Silgan shares are owned by insiders. Comparatively, 1.6% of Packaging Corporation of America shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Packaging Corporation of America beats Silgan on 12 of the 17 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 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.