Critical Review: Smurfit Westrock (SW) vs. Its Peers

Smurfit Westrock (NYSE:SW) is one of 70 publicly-traded companies in the “Containers & Packaging” industry, but how does it compare to its peers? We will compare Smurfit Westrock to similar companies based on the strength of its dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Institutional & Insider Ownership

83.4% of Smurfit Westrock shares are owned by institutional investors. Comparatively, 54.4% of shares of all “Containers & Packaging” companies are owned by institutional investors. 0.5% of Smurfit Westrock shares are owned by insiders. Comparatively, 13.5% of shares of all “Containers & Packaging” companies are owned by 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

Smurfit Westrock pays an annual dividend of $1.80 per share and has a dividend yield of 3.7%. Smurfit Westrock pays out 191.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Containers & Packaging” companies pay a dividend yield of 4.7% and pay out -79.2% of their earnings in the form of a dividend. Smurfit Westrock lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares Smurfit Westrock and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Smurfit Westrock	$31.33 billion	$699.00 million	52.41
Smurfit Westrock Competitors	$6.11 billion	$208.36 million	13.26

Smurfit Westrock has higher revenue and earnings than its peers. Smurfit Westrock is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations for Smurfit Westrock and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smurfit Westrock	0	2	11	0	2.85
Smurfit Westrock Competitors	384	2326	3387	84	2.51

Smurfit Westrock currently has a consensus target price of $57.62, suggesting a potential upside of 16.95%. As a group, “Containers & Packaging” companies have a potential upside of 31.30%. Given Smurfit Westrock’s peers higher probable upside, analysts clearly believe Smurfit Westrock has less favorable growth aspects than its peers.

Profitability

This table compares Smurfit Westrock and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smurfit Westrock	1.59%	4.60%	1.85%
Smurfit Westrock Competitors	-28.70%	-31.75%	2.17%

Risk and Volatility

Smurfit Westrock has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Smurfit Westrock’s peers have a beta of 0.80, meaning that their average stock price is 20% less volatile than the S&P 500.

Summary

Smurfit Westrock beats its peers on 9 of the 15 factors compared.

Smurfit Westrock Company Profile

Smurfit Westrock Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland and internationally. The company produces containerboard that it converts into corrugated containers or sells to third parties, as well as produces other types of paper, such as consumer packaging board, sack paper, graphic paper, solid board and graphic board, and other paper-based packaging products, such as consumer packaging, solid board packaging, paper sacks, and other packaging products, including bag-in-box. It also produces linerboard and corrugated medium, paperboard, and non-packaging grades of paper, as well as converted products, such as folding cartons and corrugated boxes, and other products; recycled paper-based packaging products; and packaging machinery. The company primarily serves food and beverage, e-commerce, retail, consumer goods, industrial, and foodservice markets. Smurfit Westrock Plc was founded in 1934 and is headquartered in Dublin, Ireland.