Reviewing Packaging Corporation of America (NYSE:PKG) and Ball (NYSE:BALL)

Ball (NYSE:BALL) and Packaging Corporation of America (NYSE:PKG) are both large-cap materials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Dividends

Ball pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Packaging Corporation of America pays an annual dividend of $6.00 per share and has a dividend yield of 2.6%. Ball pays out 22.7% of its earnings in the form of a dividend. Packaging Corporation of America pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Ball and Packaging Corporation of America”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ball	$13.16 billion	1.21	$912.00 million	$3.53	17.00
Packaging Corporation of America	$8.99 billion	2.33	$774.10 million	$7.70	30.48

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

Risk & Volatility

Ball has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Packaging Corporation of America has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ball and Packaging Corporation of America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ball	1	4	8	0	2.54
Packaging Corporation of America	0	3	6	1	2.80

Ball currently has a consensus target price of $71.69, indicating a potential upside of 19.48%. Packaging Corporation of America has a consensus target price of $264.14, indicating a potential upside of 12.54%. Given Ball’s higher probable upside, research analysts clearly believe Ball is more favorable than Packaging Corporation of America.

Profitability

This table compares Ball and Packaging Corporation of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ball	6.61%	18.76%	5.35%
Packaging Corporation of America	7.25%	18.94%	8.10%

Institutional & Insider Ownership

86.5% of Ball shares are owned by institutional investors. Comparatively, 89.8% of Packaging Corporation of America shares are owned by institutional investors. 0.6% of Ball shares are owned by insiders. Comparatively, 1.6% of Packaging Corporation of America shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Packaging Corporation of America beats Ball on 11 of the 17 factors compared between the two stocks.

About Ball

Ball Corporation supplies aluminum packaging products for the beverage, personal care, and household products industries in the United States, Brazil, and internationally. The company manufactures and sells aluminum beverage containers to fillers of carbonated soft drinks, beer, energy drinks, and other beverages. It also manufactures and sells extruded aluminum aerosol containers, recloseable aluminum bottles, aluminum cups, and aluminum slugs. Ball Corporation was founded in 1880 and is headquartered in Westminster, Colorado.

About Packaging Corporation of America

Packaging Corporation of America engages in the production of container products. It operates through the following segments: Packaging, Paper, and Corporate and Other. The Packaging segment offers a variety of corrugated packaging products, such as conventional shipping containers. The Paper segment manufactures and sells a range of papers, including communication-based papers, and pressure sensitive papers. The Corporate and Other segment focuses on transportation assets, such as rail cars, and trucks. The company was founded in 1959 and is headquartered in Lake Forest, IL.