Financial Survey: Packaging Corporation of America (NYSE:PKG) & Amcor (NYSE:AMCR)

Packaging Corporation of America (NYSE:PKG) and Amcor (NYSE:AMCR) are both large-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of current ratings for Packaging Corporation of America and Amcor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Packaging Corporation of America	0	4	1	1	2.50
Amcor	0	2	7	0	2.78

Packaging Corporation of America presently has a consensus target price of $215.40, suggesting a potential upside of 11.03%. Amcor has a consensus target price of $11.4167, suggesting a potential upside of 34.55%. Given Amcor’s stronger consensus rating and higher possible upside, analysts plainly believe Amcor is more favorable than Packaging Corporation of America.

Profitability

This table compares Packaging Corporation of America and Amcor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Packaging Corporation of America	10.47%	20.08%	10.04%
Amcor	3.40%	19.43%	5.15%

Dividends

Packaging Corporation of America pays an annual dividend of $5.00 per share and has a dividend yield of 2.6%. Amcor pays an annual dividend of $0.51 per share and has a dividend yield of 6.0%. Packaging Corporation of America pays out 49.9% of its earnings in the form of a dividend. Amcor pays out 141.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amcor has increased its dividend for 5 consecutive years. Amcor is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Packaging Corporation of America and Amcor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Packaging Corporation of America	$8.38 billion	2.08	$805.10 million	$10.02	19.36
Amcor	$15.01 billion	0.82	$511.00 million	$0.36	23.57

Packaging Corporation of America has higher earnings, but lower revenue than Amcor. Packaging Corporation of America is trading at a lower price-to-earnings ratio than Amcor, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

89.8% of Packaging Corporation of America shares are owned by institutional investors. Comparatively, 45.1% of Amcor shares are owned by institutional investors. 1.5% of Packaging Corporation of America shares are owned by company insiders. Comparatively, 0.6% of Amcor 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.

Risk and Volatility

Packaging Corporation of America has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Amcor has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Summary

Packaging Corporation of America beats Amcor on 11 of the 18 factors compared between the two stocks.

About Packaging Corporation of America

Packaging Corporation of America engages in the production of container products. It operates through the following segments: Packaging, Paper, and Corporate and Other. The Packaging segment offers a variety of corrugated packaging products, such as conventional shipping containers. The Paper segment manufactures and sells a range of papers, including communication-based papers, and pressure sensitive papers. The Corporate and Other segment focuses on transportation assets, such as rail cars, and trucks. The company was founded in 1959 and is headquartered in Lake Forest, IL.

About Amcor

Amcor plc develops, produces, and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. The company operates through two segments, Flexibles and Rigid Packaging. The Flexibles segment provides flexible and film packaging products in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries. The Rigid Packaging segment offers rigid containers for various beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads, and personal care items; and plastic caps for various applications. The company sells its products through its direct sales force. Amcor plc was incorporated in 2018 and is headquartered in Zurich, Switzerland.