Analyzing Greif Bros. Corporation (GEF) & Silgan Holdings (SLGN)
Greif Bros. Corporation (NYSE: GEF) and Silgan Holdings (NASDAQ:SLGN) are both mid-cap industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.
Risk and Volatility
Greif Bros. Corporation has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Silgan Holdings has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.
This table compares Greif Bros. Corporation and Silgan Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Greif Bros. Corporation||2.65%||15.49%||4.74%|
Earnings & Valuation
This table compares Greif Bros. Corporation and Silgan Holdings’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Greif Bros. Corporation||$3.54 billion||0.43||$459.50 million||$1.59||36.82|
|Silgan Holdings||$3.77 billion||0.86||$470.07 million||$1.24||23.73|
Silgan Holdings has higher revenue and earnings than Greif Bros. Corporation. Silgan Holdings is trading at a lower price-to-earnings ratio than Greif Bros. Corporation, indicating that it is currently the more affordable of the two stocks.
Greif Bros. Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.9%. Silgan Holdings pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. Greif Bros. Corporation pays out 105.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Silgan Holdings pays out 29.0% of its earnings in the form of a dividend. Greif Bros. Corporation has raised its dividend for 13 consecutive years. Greif Bros. Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and recommmendations for Greif Bros. Corporation and Silgan Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Greif Bros. Corporation||1||3||3||0||2.29|
Greif Bros. Corporation presently has a consensus target price of $57.00, indicating a potential downside of 2.63%. Silgan Holdings has a consensus target price of $32.33, indicating a potential upside of 9.87%. Given Silgan Holdings’ higher possible upside, analysts plainly believe Silgan Holdings is more favorable than Greif Bros. Corporation.
Insider & Institutional Ownership
47.8% of Greif Bros. Corporation shares are owned by institutional investors. Comparatively, 67.0% of Silgan Holdings shares are owned by institutional investors. 16.4% of Greif Bros. Corporation shares are owned by company insiders. Comparatively, 33.1% of Silgan Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Silgan Holdings beats Greif Bros. Corporation on 9 of the 17 factors compared between the two stocks.
About Greif Bros. Corporation
Greif, Inc. is a producer of industrial packaging products and services. The Company’s segments are Rigid Industrial Packaging & Services; Paper Packaging & Services; Flexible Products & Services, and Land Management. The Rigid Industrial Packaging & Services segment is engaged in the production and sale of rigid industrial packaging products, and services, such as container life cycle management, filling, logistics, warehousing and other packaging services. The Paper Packaging & Services segment is engaged in the production and sale of containerboard, corrugated sheets, corrugated containers and other corrugated products. The Flexible Products & Services segment is engaged in the production and sale of flexible intermediate bulk containers and related services on a global basis. The Land Management segment is involved in the management and sale of timber. As of October 31, 2016, the Company had operations in over 45 countries.
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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