Financial Analysis: Graphic Packaging Holding (GPK) & Rock-Tenn (RKT)
Graphic Packaging Holding (NYSE: GPK) and Rock-Tenn (NYSE:RKT) are both industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitabiliy, valuation, institutional ownership, analyst recommendations and earnings.
This is a breakdown of current ratings for Graphic Packaging Holding and Rock-Tenn, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Graphic Packaging Holding||0||2||8||0||2.80|
Graphic Packaging Holding currently has a consensus target price of $15.76, suggesting a potential upside of 13.92%. Given Graphic Packaging Holding’s higher probable upside, equities research analysts clearly believe Graphic Packaging Holding is more favorable than Rock-Tenn.
Earnings & Valuation
This table compares Graphic Packaging Holding and Rock-Tenn’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Graphic Packaging Holding||$4.33 billion||0.99||$707.80 million||$0.65||21.28|
Graphic Packaging Holding has higher revenue and earnings than Rock-Tenn.
Graphic Packaging Holding pays an annual dividend of $0.30 per share and has a dividend yield of 2.2%. Rock-Tenn does not pay a dividend. Graphic Packaging Holding pays out 46.2% of its earnings in the form of a dividend. Graphic Packaging Holding has raised its dividend for 5 consecutive years.
Institutional and Insider Ownership
95.4% of Graphic Packaging Holding shares are held by institutional investors. 1.0% of Graphic Packaging Holding shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Graphic Packaging Holding and Rock-Tenn’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Graphic Packaging Holding||4.80%||19.53%||4.52%|
Graphic Packaging Holding beats Rock-Tenn on 10 of the 11 factors compared between the two stocks.
About Graphic Packaging Holding
Graphic Packaging Holding Company is a provider of paper-based packaging solutions for a range of products to food, beverage and other consumer product companies. The Company’s segments include Paperboard Mills, Americas Paperboard Packaging, Europe Paperboard Packaging, and Corporate and Other. The Paperboard Mills segment includes the Company’s North American paperboard mills, which produce primarily coated unbleached kraft and coated recycled board. As of December 31, 2016, the Company had seven paperboard mills in North America. The Americas Paperboard Packaging segment includes paperboard folding cartons sold primarily to consumer packaged goods (CPG) companies serving the food, beverage and consumer product markets in the Americas. The Europe Paperboard Packaging segment includes paperboard folding cartons sold primarily to CPG companies serving the food, beverage and consumer product markets in Europe. The Corporate and Other segment includes the Pacific Rim operating segment.
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.
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