Critical Survey: Smurfit Kappa Group (OTCMKTS:SMFTF) and Ranpak (NYSE:PACK)

Ranpak (NYSE:PACK) and Smurfit Kappa Group (OTCMKTS:SMFTF) are both materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Ranpak and Smurfit Kappa Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranpak	1	0	3	0	2.50
Smurfit Kappa Group	0	0	0	0	0.00

Ranpak presently has a consensus target price of $7.00, suggesting a potential upside of 38.07%. Given Ranpak’s stronger consensus rating and higher probable upside, analysts plainly believe Ranpak is more favorable than Smurfit Kappa Group.

Profitability

This table compares Ranpak and Smurfit Kappa Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ranpak	-9.09%	-7.18%	-3.41%
Smurfit Kappa Group	N/A	N/A	N/A

Earnings and Valuation

This table compares Ranpak and Smurfit Kappa Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranpak	$395.00 million	1.10	-$38.30 million	($0.44)	-11.52
Smurfit Kappa Group	N/A	N/A	N/A	$1.19	38.02

Smurfit Kappa Group has lower revenue, but higher earnings than Ranpak. Ranpak 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.

Institutional & Insider Ownership

85.9% of Ranpak shares are held by institutional investors. Comparatively, 41.9% of Smurfit Kappa Group shares are held by institutional investors. 8.8% of Ranpak shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Ranpak beats Smurfit Kappa Group on 6 of the 11 factors compared between the two stocks.

About Ranpak

Ranpak Holdings Corp., together with its subsidiaries, provides product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains in North America, Europe, and Asia. The company offers protective packaging solutions, such as void-fill protective systems that convert paper to fill empty spaces in secondary packages and protect objects under the FillPak brand; cushioning protective systems, which convert paper into cushioning pads under the PadPak brand; and wrapping protective systems that create pads or paper mesh to wrap and protect fragile items, as well as to line boxes and provide separation when shipping various objects under the WrapPak, Geami, and ReadyRoll brands, as well as cold chain products, which are used to provide insulation for goods. It also offers end-of-line packaging automation products, which help end users automate the void filling and box closure processes after product packing is complete. The company sells its products to end users primarily through a distributor network, and directly to select end-users. Ranpak Holdings Corp. was founded in 1972 and is headquartered in Concord Township, Ohio.

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.