Critical Review: CCL Industries (OTCMKTS:CCDBF) versus Silgan (NYSE:SLGN)

Silgan (NYSE:SLGN) and CCL Industries (OTCMKTS:CCDBF) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Insider & Institutional Ownership

70.3% of Silgan shares are held by institutional investors. 1.1% of Silgan shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Silgan pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. CCL Industries pays an annual dividend of $1.04 per share and has a dividend yield of 1.5%. Silgan pays out 32.9% of its earnings in the form of a dividend. CCL Industries pays out 40.2% 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. Silgan has raised its dividend for 22 consecutive years. Silgan 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 target prices for Silgan and CCL Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silgan	0	3	8	1	2.83
CCL Industries	0	1	4	0	2.80

Silgan presently has a consensus price target of $54.00, suggesting a potential upside of 30.97%. Given Silgan’s stronger consensus rating and higher possible upside, research analysts plainly believe Silgan is more favorable than CCL Industries.

Profitability

This table compares Silgan and CCL Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Silgan	4.05%	16.74%	4.09%
CCL Industries	10.27%	14.78%	8.02%

Valuation & Earnings

This table compares Silgan and CCL Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silgan	$6.48 billion	0.67	$288.40 million	$2.55	16.17
CCL Industries	$5.48 billion	1.96	$574.28 million	$2.59	26.51

CCL Industries has lower revenue, but higher earnings than Silgan. Silgan is trading at a lower price-to-earnings ratio than CCL Industries, indicating that it is currently the more affordable of the two stocks.

Summary

Silgan beats CCL Industries on 11 of the 17 factors compared between the two stocks.

About Silgan

Silgan Holdings Inc., together with its subsidiaries, manufactures and sells rigid packaging solutions for consumer goods products in the United States and internationally. It operates through three segments: Dispensing and Specialty Closures, Metal Containers, and Custom Containers. The Dispensing and Specialty Closures segment offers a range of metal and plastic closures, and dispensing systems for food, beverage, health care, garden, home, personal care, beauty products, and hard surface cleaning products, as well as capping/sealing equipment and detection systems. The Metal Containers segment manufactures and sells steel and aluminum containers for food products, such as pet food, vegetables, soups, proteins, fruits, and other miscellaneous food products, as well as general line metal containers primarily for chemicals. The Custom Containers segment manufactures and sells custom designed and stock plastic containers for use in personal care and health care; food and beverage; household and industrial chemical; pharmaceutical; pet food and care; agricultural; automotive. This segment also provides thermoformed barrier and non-barrier bowls, and trays for food products, such as soups, other ready-to-eat meals, and pet food products; and plastic closures, caps, sifters, and fitments, as well as thermoformed tubs for food, household, and personal care products. The company markets its products primarily through direct sales force, as well as through a network of distributors, and an online shopping catalog. The company was founded in 1987 and is headquartered in Stamford, Connecticut.

About CCL Industries

CCL Industries Inc. manufactures and sells labels, consumer printable media products, technology-driven label solutions, polymer banknote substrates, and specialty films. It operates through CCL, Avery, Checkpoint, and Innovia segments. The CCL segment converts pressure sensitive and extruded film materials for a range of decorative, instructional, security, and functional applications for government institutions and global customers in consumer packaging, healthcare, chemicals, consumer durables, electronic device, and automotive markets. The Avery segment supplies labels, specialty converted media, and software solutions to enable short-run digital printing in businesses and homes alongside complementary products sold through distributors, mass-market stores, and e-commerce retailers. The Checkpoint segment engages in developing radio frequency and radio frequency identification-based technology systems for loss prevention and inventory management applications, including labeling and tagging solutions for the retail and apparel industries. The Innovia segment supplies biaxially oriented polypropylene films to customers in the pressure sensitive label materials, flexible packaging, and consumer packaged goods industries. The company operates in Canada, the United States, Puerto Rico, Mexico, Brazil, Chile, Argentina, Europe, Asia, Australia, Africa, and New Zealand. CCL Industries Inc. was founded in 1951 and is headquartered in Toronto, Canada.