Critical Review: Greif Bros. Corporation (GEF) & The Competition

Greif Bros. Corporation (NYSE: GEF) is one of 15 publicly-traded companies in the “Non-Paper Containers & Packaging” industry, but how does it weigh in compared to its peers? We will compare Greif Bros. Corporation to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Dividends

Greif Bros. Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 3.2%. Greif Bros. Corporation pays out 105.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Non-Paper Containers & Packaging” companies pay a dividend yield of 2.4% and pay out 51.6% of their earnings in the form of a dividend.

Risk and Volatility

Greif Bros. Corporation has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Greif Bros. Corporation’s peers have a beta of 1.20, indicating that their average share price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Greif Bros. Corporation and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greif Bros. Corporation 1 3 3 0 2.29
Greif Bros. Corporation Competitors 77 588 396 6 2.31

Greif Bros. Corporation currently has a consensus price target of $57.00, suggesting a potential upside of 8.80%. As a group, “Non-Paper Containers & Packaging” companies have a potential upside of 5.65%. Given Greif Bros. Corporation’s higher possible upside, analysts plainly believe Greif Bros. Corporation is more favorable than its peers.

Valuation & Earnings

This table compares Greif Bros. Corporation and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Greif Bros. Corporation $3.32 billion $74.90 million 32.95
Greif Bros. Corporation Competitors $4.67 billion $193.44 million 137.08

Greif Bros. Corporation’s peers have higher revenue and earnings than Greif Bros. Corporation. Greif Bros. Corporation is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

48.1% of Greif Bros. Corporation shares are held by institutional investors. Comparatively, 72.9% of shares of all “Non-Paper Containers & Packaging” companies are held by institutional investors. 16.8% of Greif Bros. Corporation shares are held by company insiders. Comparatively, 7.7% of shares of all “Non-Paper Containers & Packaging” companies are held 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.

Profitability

This table compares Greif Bros. Corporation and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Greif Bros. Corporation 2.65% 15.49% 4.74%
Greif Bros. Corporation Competitors 3.46% 22.74% 3.96%

Summary

Greif Bros. Corporation peers beat Greif Bros. Corporation on 9 of the 15 factors compared.

Greif Bros. Corporation Company Profile

Greif, Inc. is a producer of industrial packaging products and services. The Company’s segments are Rigid Industrial Packaging & Services; Paper Packaging & Services; Flexible Products & Services, and Land Management. The Rigid Industrial Packaging & Services segment is engaged in the production and sale of rigid industrial packaging products, and services, such as container life cycle management, filling, logistics, warehousing and other packaging services. The Paper Packaging & Services segment is engaged in the production and sale of containerboard, corrugated sheets, corrugated containers and other corrugated products. The Flexible Products & Services segment is engaged in the production and sale of flexible intermediate bulk containers and related services on a global basis. The Land Management segment is involved in the management and sale of timber. As of October 31, 2016, the Company had operations in over 45 countries.

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