O-I Glass (NYSE:OI) versus Silgan (NYSE:SLGN) Critical Contrast

Silgan (NYSE:SLGN) and O-I Glass (NYSE:OI) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Silgan and O-I Glass, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silgan	0	3	8	1	2.83
O-I Glass	2	3	4	0	2.22

Silgan presently has a consensus target price of $54.00, indicating a potential upside of 45.32%. O-I Glass has a consensus target price of $10.31, indicating a potential upside of 69.75%. Given O-I Glass’ higher probable upside, analysts clearly believe O-I Glass is more favorable than Silgan.

Valuation and Earnings

This table compares Silgan and O-I Glass”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silgan	$6.48 billion	0.61	$288.40 million	$2.55	14.57
O-I Glass	$6.36 billion	0.15	-$129.00 million	($7.52)	-0.81

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

Institutional & Insider Ownership

70.3% of Silgan shares are held by institutional investors. Comparatively, 97.2% of O-I Glass shares are held by institutional investors. 1.1% of Silgan shares are held by company insiders. Comparatively, 1.0% of O-I Glass shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Silgan pays an annual dividend of $0.84 per share and has a dividend yield of 2.3%. O-I Glass pays an annual dividend of $0.20 per share and has a dividend yield of 3.3%. Silgan pays out 32.9% of its earnings in the form of a dividend. O-I Glass pays out -2.7% 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 raised its dividend for 22 consecutive years. O-I Glass is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Silgan and O-I Glass’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Silgan	4.05%	16.74%	4.09%
O-I Glass	-18.13%	10.40%	1.43%

Risk and Volatility

Silgan has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, O-I Glass has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Summary

Silgan beats O-I Glass on 14 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 O-I Glass

O-I Glass, Inc., through its subsidiaries, engages in the manufacture and sale of glass containers to food and beverage manufacturers primarily in the Americas, Europe, and internationally. The company produces glass containers for alcoholic beverages, including beer, flavored malt beverages, spirits, and wine. It is also involved in the production of glass packaging for various food items, soft drinks, tea, juices, and pharmaceuticals. In addition, the company offers glass containers in a range of sizes, shapes, and colors. It sells its products directly to customers under annual or multi-year supply agreements, as well as through distributors. O-I Glass, Inc. was founded in 1903 and is based in Perrysburg, Ohio.