Critical Comparison: O-I Glass (NYSE:OI) and Packaging Corporation of America (NYSE:PKG)

O-I Glass (NYSE:OI) and Packaging Corporation of America (NYSE:PKG) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Institutional and Insider Ownership

97.2% of O-I Glass shares are owned by institutional investors. Comparatively, 89.8% of Packaging Corporation of America shares are owned by institutional investors. 1.0% of O-I Glass shares are owned by company insiders. Comparatively, 1.6% of Packaging Corporation of America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

O-I Glass has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Packaging Corporation of America has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares O-I Glass and Packaging Corporation of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
O-I Glass	-18.13%	10.40%	1.43%
Packaging Corporation of America	7.25%	18.94%	8.10%

Earnings & Valuation

This table compares O-I Glass and Packaging Corporation of America”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
O-I Glass	$6.43 billion	0.14	-$129.00 million	($7.52)	-0.78
Packaging Corporation of America	$8.99 billion	2.35	$774.10 million	$7.70	30.79

Packaging Corporation of America has higher revenue and earnings than O-I Glass. O-I Glass 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for O-I Glass and Packaging Corporation of America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
O-I Glass	2	3	4	0	2.22
Packaging Corporation of America	0	3	6	1	2.80

O-I Glass currently has a consensus price target of $10.31, indicating a potential upside of 76.13%. Packaging Corporation of America has a consensus price target of $271.14, indicating a potential upside of 14.38%. Given O-I Glass’ higher possible upside, equities research analysts clearly believe O-I Glass is more favorable than Packaging Corporation of America.

Summary

Packaging Corporation of America beats O-I Glass on 13 of the 15 factors compared between the two stocks.

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.

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.