Critical Analysis: O-I Glass (NYSE:OI) vs. Smurfit Kappa Group (OTCMKTS:SMFTF)

Smurfit Kappa Group (OTCMKTS:SMFTF) and O-I Glass (NYSE:OI) are both materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

41.9% of Smurfit Kappa Group shares are held by institutional investors. Comparatively, 97.2% of O-I Glass shares are held by institutional investors. 1.0% of O-I Glass shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Smurfit Kappa Group and O-I Glass, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smurfit Kappa Group	0	0	0	0	0.00
O-I Glass	2	4	3	0	2.11

O-I Glass has a consensus target price of $10.19, suggesting a potential upside of 56.85%. Given O-I Glass’ stronger consensus rating and higher probable upside, analysts clearly believe O-I Glass is more favorable than Smurfit Kappa Group.

Dividends

Smurfit Kappa Group pays an annual dividend of $0.46 per share and has a dividend yield of 1.0%. O-I Glass pays an annual dividend of $0.20 per share and has a dividend yield of 3.1%. Smurfit Kappa Group pays out 38.8% of its earnings in the form of a dividend. O-I Glass pays out -2.7% 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. O-I Glass is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Smurfit Kappa Group and O-I Glass”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smurfit Kappa Group	N/A	N/A	N/A	$1.19	38.02
O-I Glass	$6.36 billion	0.16	-$129.00 million	($7.52)	-0.86

Smurfit Kappa Group has higher earnings, but lower revenue than O-I Glass. O-I Glass is trading at a lower price-to-earnings ratio than Smurfit Kappa Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Smurfit Kappa Group and O-I Glass’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smurfit Kappa Group	N/A	N/A	N/A
O-I Glass	-18.13%	10.40%	1.43%

Summary

O-I Glass beats Smurfit Kappa Group on 10 of the 13 factors compared between the two stocks.

About Smurfit Kappa Group

Smurfit Kappa Group Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland, Germany, France, Mexico, rest of Europe, and other Americas. The company offers e-commerce, retail, consumer, industrial, bottle, protective, heavy-duty, hexacomb, and various punnet packaging products; composite cardboard tubes, bags, and sacks; and bag-in-box, a packaging system that comprises films, accessories, bags, taps, and boxes. It also provides point of sale displays; cardboards of social distancing; corrugated sheet boards, solid board sheets, folding carton sheet boards, sack Kraft papers, MG brown Kraft papers, preprint products, agro-papers, technical papers, BanaBag, and Catcher Board MB12; and various types of containerboards, such as kraftliners, testliners, and containerboard flutings. In addition, the company offers recycling solutions to cardboard and paper products; and supplies packaging machinery. It primarily serves consumer goods, industrial goods, and food and drink sectors. Smurfit Kappa Group Plc was founded in 1934 and is headquartered in Dublin, Ireland.

About O-I Glass

O-I Glass, Inc., through its subsidiaries, engages in the manufacture and sale of glass containers to food and beverage manufacturers primarily in the Americas, Europe, and internationally. The company produces glass containers for alcoholic beverages, including beer, flavored malt beverages, spirits, and wine. It is also involved in the production of glass packaging for various food items, soft drinks, tea, juices, and pharmaceuticals. In addition, the company offers glass containers in a range of sizes, shapes, and colors. It sells its products directly to customers under annual or multi-year supply agreements, as well as through distributors. O-I Glass, Inc. was founded in 1903 and is based in Perrysburg, Ohio.