Sonoco Products (NYSE: SON) and Silgan Holdings (NASDAQ:SLGN) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitabiliy, analyst recommendations, institutional ownership, risk and dividends.
This is a summary of current recommendations for Sonoco Products and Silgan Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sonoco Products currently has a consensus price target of $46.80, indicating a potential downside of 7.69%. Silgan Holdings has a consensus price target of $29.00, indicating a potential downside of 8.14%. Given Sonoco Products’ higher possible upside, research analysts clearly believe Sonoco Products is more favorable than Silgan Holdings.
This table compares Sonoco Products and Silgan Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Sonoco Products has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Silgan Holdings has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.
Sonoco Products pays an annual dividend of $1.48 per share and has a dividend yield of 2.9%. Silgan Holdings pays an annual dividend of $0.68 per share and has a dividend yield of 2.2%. Sonoco Products pays out 52.5% of its earnings in the form of a dividend. Silgan Holdings pays out 26.7% 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. Sonoco Products has increased its dividend for 13 consecutive years and Silgan Holdings has increased its dividend for 36 consecutive years.
Insider & Institutional Ownership
69.9% of Sonoco Products shares are held by institutional investors. Comparatively, 74.3% of Silgan Holdings shares are held by institutional investors. 1.9% of Sonoco Products shares are held by company insiders. Comparatively, 32.9% of Silgan Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Sonoco Products and Silgan Holdings’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sonoco Products||$4.73 billion||1.07||$623.70 million||$2.82||17.98|
|Silgan Holdings||$3.63 billion||0.96||$476.83 million||$2.55||12.38|
Sonoco Products has higher revenue and earnings than Silgan Holdings. Silgan Holdings is trading at a lower price-to-earnings ratio than Sonoco Products, indicating that it is currently the more affordable of the two stocks.
Sonoco Products beats Silgan Holdings on 9 of the 17 factors compared between the two stocks.
About Sonoco Products
Sonoco Products Company is engaged in manufacturing of industrial and consumer packaging products, and providing packaging services. The Company operates in four segments: Consumer Packaging, Paper and Industrial Converted Products, Display and Packaging, and Protective Solutions. Its Consumer Packaging segment’s products and services include round composite cans, aluminum, steel and peelable membrane easy-open closures for composite and metal cans; plastic bottles, cups and trays, and printed flexible packaging and global brand management. The Display and Packaging segment’s products and services include point-of-purchase displays; fulfilment; supply chain management, and paperboard specialties. Its Paper and Industrial Converted Products segment provides the raw material for its fiber-based packaging. The Protective Solutions segment’s products and services include custom-engineered and expanded foam protective packaging and components, and temperature-assured packaging.
About Silgan Holdings
Silgan Holdings Inc. is a holding company. The Company is a manufacturer of rigid packaging for consumer goods products. The Company operates in three business segments: metal containers, closures and plastic containers. Its metal container segment is engaged in the manufacture and sale of steel and aluminum containers for human and pet food and general line products. Its closures segment manufactures and sells metal, composite and plastic closures for food and beverage products. Its plastic containers segment manufactures and sells custom designed plastic containers and closures for personal care, food, healthcare, pharmaceutical, household and industrial chemical, pet care, agricultural, automotive and marine chemical products. The Company is a manufacturer of metal containers in North America and Europe. As of December 31, 2016, the Company’s products were used for a range of end markets and it operated 87 manufacturing plants in North America, Europe, Asia and South America.
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