Financial Contrast: Supremex (OTCMKTS:SUMXF) vs. Graphic Packaging (NYSE:GPK)

Supremex (OTCMKTS:SUMXF) and Graphic Packaging (NYSE:GPK) are both consumer cyclical companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Supremex and Graphic Packaging, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Supremex	0	1	0	0	2.00
Graphic Packaging	1	3	4	0	2.38

Graphic Packaging has a consensus target price of $28.13, indicating a potential downside of 0.69%. Given Graphic Packaging’s stronger consensus rating and higher probable upside, analysts clearly believe Graphic Packaging is more favorable than Supremex.

Profitability

This table compares Supremex and Graphic Packaging’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Supremex	N/A	N/A	N/A
Graphic Packaging	7.36%	32.55%	7.83%

Earnings & Valuation

This table compares Supremex and Graphic Packaging’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Supremex	N/A	N/A	N/A	$0.38	7.25
Graphic Packaging	$9.43 billion	0.92	$723.00 million	$2.21	12.81

Graphic Packaging has higher revenue and earnings than Supremex. Supremex is trading at a lower price-to-earnings ratio than Graphic Packaging, indicating that it is currently the more affordable of the two stocks.

Dividends

Supremex pays an annual dividend of $0.21 per share and has a dividend yield of 7.4%. Graphic Packaging pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Supremex pays out 53.7% of its earnings in the form of a dividend. Graphic Packaging pays out 18.1% 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. Graphic Packaging has raised its dividend for 2 consecutive years.

Insider & Institutional Ownership

72.6% of Supremex shares are owned by institutional investors. Comparatively, 99.7% of Graphic Packaging shares are owned by institutional investors. 1.2% of Graphic Packaging shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Graphic Packaging beats Supremex on 13 of the 14 factors compared between the two stocks.

About Supremex

Supremex Inc. engages in the manufacture and markets envelopes, and paper-based packaging solutions and specialty products to corporations, resellers, government entities, small and medium sized enterprises, direct mailers, and solutions providers primarily in Canada and the United States. The company offers a range of stock and custom envelopes in various styles, shapes, and colors; and e-Commerce fulfillment packaging solutions; labels; polyethylene bags for courier applications; and bubble mailers. It also provides commercial printing services, including printing, packaging and displays, finishing, and large format services. The company serves various industries, including pharmaceutical, wine and spirits, personal care and beauty, packaging, ecommerce, nutraceutical, food and beverage, apparel, fulfillment, presentation, and display and promotional print and packaging industries. Supremex Inc. was founded in 1977 and is based in Lasalle, Canada.

About Graphic Packaging

Graphic Packaging Holding Company, together with its subsidiaries, designs, produces, and sells consumer packaging products to brands in food, beverage, foodservice, household, and other consumer products. It operates through three segments: Paperboard Manufacturing, Americas Paperboard Packaging, and Europe Paperboard Packaging. The company offers unbleached, bleached, and recycled paperboard to various paperboard packaging converters and brokers. It also provides paperboard packaging products for consumer packaged goods companies; and cups, lids, and food containers for foodservice companies and quick-service restaurants serving the food, beverage, and consumer product markets, including healthcare and beauty. The company also designs, manufactures, and installs specialized packaging machines. The company sells its products through sales offices, as well as through broker arrangements with third parties in the Americas, Europe, and the Asia Pacific. Graphic Packaging Holding Company was incorporated in 2007 and is headquartered in Atlanta, Georgia.