Avery Dennison Corporation (NYSE: AVY) and Ball Corporation (NYSE:BLL) are both mid-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitabiliy, earnings, institutional ownership, valuation and risk.

Dividends

Avery Dennison Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 1.9%. Ball Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Avery Dennison Corporation pays out 42.3% of its earnings in the form of a dividend. Ball Corporation pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avery Dennison Corporation has increased its dividend for 6 consecutive years. Avery Dennison Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Avery Dennison Corporation and Ball Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avery Dennison Corporation 0 2 4 0 2.67
Ball Corporation 0 5 4 0 2.44

Avery Dennison Corporation currently has a consensus target price of $90.60, suggesting a potential downside of 3.14%. Ball Corporation has a consensus target price of $43.81, suggesting a potential upside of 6.42%. Given Ball Corporation’s higher possible upside, analysts plainly believe Ball Corporation is more favorable than Avery Dennison Corporation.

Profitability

This table compares Avery Dennison Corporation and Ball Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avery Dennison Corporation 6.14% 39.29% 8.44%
Ball Corporation 1.70% 17.54% 3.91%

Valuation and Earnings

This table compares Avery Dennison Corporation and Ball Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avery Dennison Corporation $6.26 billion 1.32 $792.50 million $4.26 21.96
Ball Corporation $9.78 billion 1.48 $1.46 billion $0.51 80.73

Ball Corporation has higher revenue and earnings than Avery Dennison Corporation. Avery Dennison Corporation is trading at a lower price-to-earnings ratio than Ball Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

87.6% of Avery Dennison Corporation shares are owned by institutional investors. Comparatively, 46.6% of Ball Corporation shares are owned by institutional investors. 1.4% of Avery Dennison Corporation shares are owned by insiders. Comparatively, 2.7% of Ball Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Avery Dennison Corporation has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Ball Corporation has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Summary

Avery Dennison Corporation beats Ball Corporation on 10 of the 16 factors compared between the two stocks.

Avery Dennison Corporation Company Profile

Avery Dennison Corporation (Avery Dennison) is engaged in the production of pressure-sensitive materials and a range of tickets, tags, labels and other converted products. The Company’s segments include Label and Graphic Materials (LGM); Retail Branding and Information Solutions (RBIS), and Industrial and Healthcare Materials (IHM). The Company’s LGM segment manufactures and sells Fasson-, JAC-, and Avery Dennison-brand pressure-sensitive label and packaging materials, Avery Dennison- and Mactac-brand graphics, and Avery Dennison-brand reflective products. The Company’s RBIS segment designs, manufactures and sells a range of branding and information solutions to retailers, brand owners, apparel manufacturers, distributors and industrial customers on a global basis. The Company’s IHM segment manufactures and sells Fasson-brand and Avery Dennison-brand tapes and fasteners, Vancive-brand medical pressure-sensitive adhesive (PSA) based materials and products, and performance polymers.

Ball Corporation Company Profile

Ball Corporation is a supplier of metal packaging to the beverage, food, personal care and household products industries. The Company’s packaging products are produced for a range of end uses and are manufactured in facilities around the world. Its segments include beverage packaging, North and Central America; beverage packaging, South America; beverage packaging, Europe; food and aerosol packaging; aerospace, and other. Its major product line is aluminum and steel beverage containers. It produces steel food, aerosol and extruded aluminum aerosol containers and aluminum slugs. Its aerospace business designs, develops and manufactures aerospace systems for civil, commercial and national cyber security aerospace markets. It produces spacecraft, instruments and sensors, radio frequency systems and components, data exploitation solutions and a range of aerospace technologies and products.

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