Analyzing Avery Dennison (NYSE:AVY) and Amcor (NYSE:AMCR)

Amcor (NYSE:AMCR) and Avery Dennison (NYSE:AVY) are both large-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Dividends

Amcor pays an annual dividend of $0.51 per share and has a dividend yield of 6.0%. Avery Dennison pays an annual dividend of $3.76 per share and has a dividend yield of 2.1%. Amcor pays out 141.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avery Dennison pays out 42.2% of its earnings in the form of a dividend. Amcor has raised its dividend for 5 consecutive years and Avery Dennison has raised its dividend for 15 consecutive years.

Insider and Institutional Ownership

45.1% of Amcor shares are owned by institutional investors. Comparatively, 94.2% of Avery Dennison shares are owned by institutional investors. 0.6% of Amcor shares are owned by company insiders. Comparatively, 0.8% of Avery Dennison shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Amcor and Avery Dennison, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amcor	0	2	7	0	2.78
Avery Dennison	0	5	6	0	2.55

Amcor currently has a consensus target price of $11.4167, suggesting a potential upside of 33.89%. Avery Dennison has a consensus target price of $197.60, suggesting a potential upside of 12.86%. Given Amcor’s stronger consensus rating and higher possible upside, research analysts clearly believe Amcor is more favorable than Avery Dennison.

Volatility & Risk

Amcor has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Avery Dennison has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Profitability

This table compares Amcor and Avery Dennison’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amcor	3.40%	19.43%	5.15%
Avery Dennison	8.14%	33.14%	8.91%

Earnings and Valuation

This table compares Amcor and Avery Dennison”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amcor	$15.01 billion	0.82	$511.00 million	$0.36	23.69
Avery Dennison	$8.76 billion	1.56	$704.90 million	$8.91	19.65

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

Summary

Avery Dennison beats Amcor on 11 of the 17 factors compared between the two stocks.

About Amcor

Amcor plc develops, produces, and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. The company operates through two segments, Flexibles and Rigid Packaging. The Flexibles segment provides flexible and film packaging products in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries. The Rigid Packaging segment offers rigid containers for various beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads, and personal care items; and plastic caps for various applications. The company sells its products through its direct sales force. Amcor plc was incorporated in 2018 and is headquartered in Zurich, Switzerland.

About Avery Dennison

Avery Dennison Corporation operates as a materials science and digital identification solutions company in the United States, Europe, the Middle East, North Africa, Asia, Latin, America, and internationally. It provides pressure-sensitive materials comprising papers, plastic films, metal foils, and fabrics; performance tapes products, including tapes for wire harnessing, as well as cable wrapping for automotive, electrical, and general industrial applications; mechanical fasteners, which are precision-extruded and injection-molded plastic devices used in various automotive, general industrial, and retail applications; and other pressure-sensitive adhesive-based materials and converted products under the Fasson, JAC, Yongle, and Avery Dennison brands. The company also offers graphics and reflective products for the architectural, commercial sign, digital printing, and other related market segments; durable cast and reflective films to the construction, automotive, and fleet transportation market segments; reflective films for traffic and safety applications; and pressure-sensitive vinyl and specialty materials designed for digital imaging, screen printing, and sign cutting applications under the Avery Dennison and Mactac brand names. In addition, it provides branding solutions include brand embellishments, graphic tickets, tags, and labels, and sustainable packaging; and information solutions include item-level RFID, visibility and loss prevention, price ticketing and marking, productivity and media solutions, and brand protection and security solutions, as well as care, content, and country of origin compliance solutions. It serves home and personal care, apparel, e-commerce, logistics, food and grocery, pharmaceuticals, and automotive industries. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990. Avery Dennison Corporation was founded in 1935 and is headquartered in Mentor, Ohio.