Head-To-Head Comparison: Graphic Packaging Holding (GPK) and KapStone Paper and Packaging Corporation (NYSE:KS)

Graphic Packaging Holding (NYSE: GPK) and KapStone Paper and Packaging Corporation (NYSE:KS) are both mid-cap industrial products companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitabiliy, earnings, institutional ownership, analyst recommendations, valuation and dividends.

Profitability

This table compares Graphic Packaging Holding and KapStone Paper and Packaging Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Graphic Packaging Holding 3.98% 18.22% 4.24%
KapStone Paper and Packaging Corporation 2.39% 11.26% 3.10%

Earnings and Valuation

This table compares Graphic Packaging Holding and KapStone Paper and Packaging Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Graphic Packaging Holding $4.32 billion 0.94 $690.10 million $0.55 23.95
KapStone Paper and Packaging Corporation $3.14 billion 0.69 $346.91 million $0.77 28.88

Graphic Packaging Holding has higher revenue and earnings than KapStone Paper and Packaging Corporation. Graphic Packaging Holding is trading at a lower price-to-earnings ratio than KapStone Paper and Packaging Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Graphic Packaging Holding pays an annual dividend of $0.30 per share and has a dividend yield of 2.3%. KapStone Paper and Packaging Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Graphic Packaging Holding pays out 54.5% of its earnings in the form of a dividend. KapStone Paper and Packaging Corporation pays out 51.9% 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.

Insider and Institutional Ownership

95.9% of Graphic Packaging Holding shares are owned by institutional investors. Comparatively, 82.0% of KapStone Paper and Packaging Corporation shares are owned by institutional investors. 1.0% of Graphic Packaging Holding shares are owned by insiders. Comparatively, 13.3% of KapStone Paper and Packaging Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Graphic Packaging Holding has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, KapStone Paper and Packaging Corporation has a beta of 2.84, suggesting that its share price is 184% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Graphic Packaging Holding and KapStone Paper and Packaging Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Graphic Packaging Holding 0 2 8 0 2.80
KapStone Paper and Packaging Corporation 0 6 5 0 2.45

Graphic Packaging Holding currently has a consensus target price of $15.73, indicating a potential upside of 19.40%. KapStone Paper and Packaging Corporation has a consensus target price of $26.60, indicating a potential upside of 19.60%. Given KapStone Paper and Packaging Corporation’s higher possible upside, analysts plainly believe KapStone Paper and Packaging Corporation is more favorable than Graphic Packaging Holding.

Summary

Graphic Packaging Holding beats KapStone Paper and Packaging Corporation on 10 of the 16 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.

About KapStone Paper and Packaging Corporation

KapStone Paper and Packaging Corporation is a producer of containerboard and the kraft paper in North America. The Company operates through two segments: Paper and Packaging, and Distribution. The Paper and Packaging segment manufactures and sells a range of containerboard, corrugated products and specialty paper for industrial and consumer markets. The Distribution segment, which operates under the Victory and Golden State Container trade names, provides its customers packaging solutions and services and distributes corrugated packaging materials and other specialty packaging products, which include stretch film, void fill, carton sealing tape and other specialty tapes. The Company produces a range of products ranging from basic corrugated shipping containers to specialized packaging. The Company also produces packaging for fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.

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