Smurfit Westrock (NYSE:SW) versus Sonoco Products (NYSE:SON) Financial Analysis

Sonoco Products (NYSE:SON) and Smurfit Westrock (NYSE:SW) are both industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Profitability

This table compares Sonoco Products and Smurfit Westrock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonoco Products	5.57%	20.10%	6.73%
Smurfit Westrock	1.36%	7.13%	2.67%

Dividends

Sonoco Products pays an annual dividend of $2.08 per share and has a dividend yield of 3.8%. Smurfit Westrock pays an annual dividend of $1.21 per share and has a dividend yield of 2.7%. Sonoco Products pays out 52.5% of its earnings in the form of a dividend. Smurfit Westrock pays out 101.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sonoco Products is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sonoco Products and Smurfit Westrock, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonoco Products	1	0	2	0	2.33
Smurfit Westrock	0	3	3	0	2.50

Sonoco Products presently has a consensus price target of $59.00, suggesting a potential upside of 8.04%. Smurfit Westrock has a consensus price target of $56.50, suggesting a potential upside of 25.22%. Given Smurfit Westrock’s stronger consensus rating and higher probable upside, analysts plainly believe Smurfit Westrock is more favorable than Sonoco Products.

Valuation & Earnings

This table compares Sonoco Products and Smurfit Westrock”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonoco Products	$6.61 billion	0.81	$474.96 million	$3.96	13.80
Smurfit Westrock	$12.46 billion	0.93	-$22.40 million	$1.19	38.06

Sonoco Products has higher earnings, but lower revenue than Smurfit Westrock. Sonoco Products is trading at a lower price-to-earnings ratio than Smurfit Westrock, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.7% of Sonoco Products shares are held by institutional investors. Comparatively, 83.4% of Smurfit Westrock shares are held by institutional investors. 0.5% of Sonoco Products shares are held by company insiders. Comparatively, 0.5% of Smurfit Westrock shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Sonoco Products has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Smurfit Westrock has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

About Sonoco Products

Sonoco Products Company, together with its subsidiaries, designs, develops, manufactures, and sells various engineered and sustainable packaging products in North and South America, Europe, Australia, and Asia. The company operates Consumer Packaging and Industrial Paper Packaging segments. The Consumer Packaging segment offers round and shaped rigid paper, steel, and plastic containers; metal and peelable membrane ends, closures, and components; thermoformed plastic trays and enclosures; and high-barrier flexible packaging products. The Industrial Paper Packaging segment provides paperboard tubes, cones, and cores; paper-based protective packaging products; and uncoated recycled paperboard products. It also offers various packaging materials, including plastic, paper, foam, and other specialty materials. Sonoco Products Company sells its products in various markets, which include paper, textile, film, food, packaging, construction, and wire and cable. The company was founded in 1899 and is headquartered in Hartsville, South Carolina.

About Smurfit Westrock

Smurfit Westrock Plc, together with its subsidiaries, manufactures, distributes, and sells containerboard, corrugated containers, and other paper-based packaging products in Ireland and internationally. The company produces containerboard that it converts into corrugated containers or sells to third parties, as well as produces other types of paper, such as consumer packaging board, sack paper, graphic paper, solid board and graphic board, and other paper-based packaging products, such as consumer packaging, solid board packaging, paper sacks, and other packaging products, including bag-in-box. It also produces linerboard and corrugated medium, paperboard, and non-packaging grades of paper, as well as converted products, such as folding cartons and corrugated boxes, and other products; recycled paper-based packaging products; and packaging machinery. The company primarily serves food and beverage, e-commerce, retail, consumer goods, industrial, and foodservice markets. Smurfit Westrock Plc was founded in 1934 and is headquartered in Dublin, Ireland.