Analyzing Packaging Co. of America (NYSE:PKG) and Smurfit Westrock (NYSE:SW)

Smurfit Westrock (NYSE:SW) and Packaging Co. of America (NYSE:PKG) are both large-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

Smurfit Westrock pays an annual dividend of $1.21 per share and has a dividend yield of 2.5%. Packaging Co. of America pays an annual dividend of $5.00 per share and has a dividend yield of 2.3%. Smurfit Westrock pays out 101.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Packaging Co. of America pays out 62.5% of its earnings in the form of a dividend. Packaging Co. of America has increased its dividend for 14 consecutive years.

Earnings & Valuation

This table compares Smurfit Westrock and Packaging Co. of America”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smurfit Westrock	$20.31 billion	1.25	-$22.40 million	$1.19	40.98
Packaging Co. of America	$7.93 billion	2.44	$765.20 million	$8.00	26.92

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

Profitability

This table compares Smurfit Westrock and Packaging Co. of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smurfit Westrock	1.36%	7.13%	2.67%
Packaging Co. of America	9.06%	18.21%	8.42%

Analyst Ratings

This is a breakdown of recent recommendations for Smurfit Westrock and Packaging Co. of America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smurfit Westrock	0	2	3	0	2.60
Packaging Co. of America	0	4	3	0	2.43

Smurfit Westrock currently has a consensus target price of $57.80, indicating a potential upside of 18.52%. Packaging Co. of America has a consensus target price of $190.50, indicating a potential downside of 11.54%. Given Smurfit Westrock’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Smurfit Westrock is more favorable than Packaging Co. of America.

Insider and Institutional Ownership

83.4% of Smurfit Westrock shares are held by institutional investors. Comparatively, 89.8% of Packaging Co. of America shares are held by institutional investors. 0.5% of Smurfit Westrock shares are held by insiders. Comparatively, 1.6% of Packaging Co. of America shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Smurfit Westrock has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Packaging Co. of America has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Summary

Packaging Co. of America beats Smurfit Westrock on 10 of the 16 factors compared between the two stocks.

About Smurfit Westrock

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.

About Packaging Co. of America

Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products in the United States. The company operates through three segments: Packaging, Paper, and Corporate and Other. The Packaging segment offers various containerboard and corrugated packaging products, such as conventional shipping containers used to protect and transport manufactured goods; multi-color boxes and displays that help to merchandise the packaged product in retail locations; and honeycomb protective packaging products, as well as packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. This segment sells its corrugated products through a direct sales and marketing organization, independent brokers, and distribution partners. The Paper segment manufactures and sells commodity and specialty papers, as well as communication papers, including cut-size office papers, and printing and converting papers. This segment sells white papers through its sales and marketing organization. The Corporate and Other segment includes corporate support staff services and related assets and liabilities; and transportation assets, such as rail cars and trucks for transportation. Packaging Corporation of America was founded in 1867 and is headquartered in Lake Forest, Illinois.