Critical Analysis: Rock-Tenn (RKT) & Westrock (WRK)
Rock-Tenn (NYSE: RKT) and Westrock (NYSE:WRK) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.
Insider and Institutional Ownership
88.6% of Westrock shares are owned by institutional investors. 2.7% of Westrock shares are owned by 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.
This is a breakdown of current recommendations for Rock-Tenn and Westrock, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Westrock has a consensus price target of $63.00, suggesting a potential upside of 8.75%. Given Westrock’s higher probable upside, analysts clearly believe Westrock is more favorable than Rock-Tenn.
This table compares Rock-Tenn and Westrock’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Rock-Tenn and Westrock’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westrock||$14.41 billion||1.01||$2.12 billion||$1.64||35.32|
Westrock has higher revenue and earnings than Rock-Tenn.
Westrock pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. Rock-Tenn does not pay a dividend. Westrock pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rock-Tenn has increased its dividend for 5 consecutive years.
Westrock beats Rock-Tenn on 7 of the 12 factors compared between the two stocks.
Rock-Tenn Company Profile
Rock-Tenn Company (Rock-Tenn) is an integrated manufacturer of corrugated and consumer packaging. The Company operates in operate locations in the United States, Canada, Mexico, Chile, Argentina, Puerto Rico and China. Rock-Tenn has three reportable business segments: Corrugated Packaging, consisting of its containerboard mills and its corrugated converting operations; Consumer Packaging, consisting of the Company’s coated and uncoated paperboard mills, consumer packaging converting operations and merchandising display facilities, and Recycling, which consists of its recycled fiber brokerage and collection operations.
Westrock Company Profile
WestRock Company, incorporated on March 6, 2015, is a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. The Company also develops real estate in the Charleston, South Carolina region. The Company’s segments include Corrugated Packaging, Consumer Packaging, and Land and Development. The Corrugated Packaging segment consists of its containerboard mill and corrugated packaging operations, as well as its recycling operations. The Consumer Packaging segment consists of consumer mills, folding carton, beverage, merchandising displays, and partition operations. The Land and Development segment is engaged in the development and sale of real estate primarily in Charleston, South Carolina.
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