Transcontinental (OTCMKTS:TCLCF – Get Free Report) and Karat Packaging (NASDAQ:KRT – Get Free Report) are both consumer cyclical companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, profitability, analyst recommendations, risk and valuation.
Institutional and Insider Ownership
0.0% of Transcontinental shares are owned by institutional investors. Comparatively, 25.2% of Karat Packaging shares are owned by institutional investors. 71.5% of Karat Packaging shares are owned by 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.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Transcontinental and Karat Packaging, as reported by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Transcontinental | 0 | 0 | 0 | 0 | N/A |
Karat Packaging | 0 | 0 | 3 | 0 | 3.00 |
Valuation and Earnings
This table compares Transcontinental and Karat Packaging’s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Transcontinental | N/A | N/A | N/A | $1.34 | 7.53 |
Karat Packaging | $405.65 million | 1.33 | $32.47 million | $1.62 | 16.70 |
Karat Packaging has higher revenue and earnings than Transcontinental. Transcontinental is trading at a lower price-to-earnings ratio than Karat Packaging, indicating that it is currently the more affordable of the two stocks.
Dividends
Transcontinental pays an annual dividend of $0.63 per share and has a dividend yield of 6.2%. Karat Packaging pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. Transcontinental pays out 46.6% of its earnings in the form of a dividend. Karat Packaging pays out 74.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Karat Packaging has raised its dividend for 1 consecutive years. Transcontinental is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Transcontinental and Karat Packaging’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Transcontinental | N/A | N/A | N/A |
Karat Packaging | 8.00% | 22.54% | 13.21% |
Summary
Karat Packaging beats Transcontinental on 11 of the 13 factors compared between the two stocks.
About Transcontinental
Transcontinental Inc. engages in the flexible packaging business in Canada, the United States, Latin America, the United Kingdom, Australia, and New Zealand. It operates through Packaging, Printing, and Media sectors. The Packaging sector engages in the extrusion, lamination, printing, and converting packaging solutions; and manufacturing and recycling flexible plastic, including rollstock, bags and pouches, coextruded films, shrink films and bags, and advanced coatings. This sector serves agriculture, beverage, cheese and dairy, coffee and tea, frozen, health and wellness, home and personal care, industrial, lawn and garden, meat and protein, pet food, snacks, confection and dairy foods, tobacco, music, and entertainment markets, as well as supermarkets. The Printing sector provides integrated services for retailers, such as premedia services, flyer and in-store marketing product printing, and door-to-door distribution, as well as print solutions for newspapers, magazines, 4-color books, and personalized and mass marketing products. The Media sector is involved in printing and digital publishing of educational and trade books, and specialized publications for professionals and newspapers in French and English. Transcontinental Inc. was founded in 1976 and is headquartered in Montreal, Canada.
About Karat Packaging
Karat Packaging Inc., together with its subsidiaries, engages in the manufacture and distribution of single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company also provides new product development, design, printing, and logistics services. It offers its products to national and regional distributors, restaurant chains, retail establishments, and online customers. The company was founded in 2000 and is based in Chino, California.
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