Reynolds Consumer Products (REYN) versus Its Peers Critical Review

Reynolds Consumer Products (NASDAQ:REYN) is one of 46 publicly-traded companies in the “CONSM PD – MISC DIS” industry, but how does it compare to its competitors? We will compare Reynolds Consumer Products to similar businesses based on the strength of its earnings, dividends, institutional ownership, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

26.8% of Reynolds Consumer Products shares are owned by institutional investors. Comparatively, 40.3% of shares of all “CONSM PD – MISC DIS” companies are owned by institutional investors. 0.2% of Reynolds Consumer Products shares are owned by insiders. Comparatively, 22.2% of shares of all “CONSM PD – MISC DIS” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Reynolds Consumer Products and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Reynolds Consumer Products	$3.70 billion	$352.00 million	13.64
Reynolds Consumer Products Competitors	$2.80 billion	$103.51 million	4.08

Reynolds Consumer Products has higher revenue and earnings than its competitors. Reynolds Consumer Products is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Reynolds Consumer Products and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reynolds Consumer Products	9.11%	16.87%	7.27%
Reynolds Consumer Products Competitors	0.03%	1.25%	0.50%

Dividends

Reynolds Consumer Products pays an annual dividend of $0.92 per share and has a dividend yield of 4.2%. Reynolds Consumer Products pays out 57.5% of its earnings in the form of a dividend. As a group, “CONSM PD – MISC DIS” companies pay a dividend yield of 3.1% and pay out 72.0% of their earnings in the form of a dividend. Reynolds Consumer Products is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Risk & Volatility

Reynolds Consumer Products has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Reynolds Consumer Products’ competitors have a beta of -0.51, suggesting that their average share price is 151% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Reynolds Consumer Products and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reynolds Consumer Products	0	6	3	0	2.33
Reynolds Consumer Products Competitors	117	915	999	28	2.46

Reynolds Consumer Products presently has a consensus target price of $27.89, suggesting a potential upside of 27.75%. As a group, “CONSM PD – MISC DIS” companies have a potential upside of 20.86%. Given Reynolds Consumer Products’ higher probable upside, equities research analysts plainly believe Reynolds Consumer Products is more favorable than its competitors.

Summary

Reynolds Consumer Products beats its competitors on 10 of the 15 factors compared.

About Reynolds Consumer Products

Reynolds Consumer Products Inc. produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and EZ Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally. The Hefty Waste & Storage segment offers trash bags under the Hefty Ultra Strong and Hefty Strong brands; and food storage bags under the Hefty and Baggies brands. This segment also provides a suite of products, including compostable bags, bags made from recycled materials, and the orange bags. The Hefty Tableware segment offers disposable and compostable plates, bowls, platters, cups, and cutlery under the Hefty brand. The Presto Products segment primarily sells store brand products in food storage bags, trash bags, reusable storage containers, and plastic wrap categories. It offers both branded and store brand products to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets, and eCommerce retailers. The company was founded in 1947 and is headquartered in Lake Forest, Illinois. Reynolds Consumer Products Inc. is a subsidiary of Packaging Finance Limited.