It's hard to argue that
Silgan (Nasdaq:
SLGN) doesn't have a very attractive business with pretty significant
barriers to entry.
Silgan has a better than 50% share in North American can markets, and
likewise substantial share in its closures business. What's more, other
competitors like
Ball (NYSE:
BLL),
Crown Holdings (NYSE:
CCK) and
Berry Plastics (NYSE:
BERY)
tend towards the rational when it comes to pricing. Couple that with a
strong emphasis on returning capital to shareholders (with dividends and
buybacks), and you have what looks like a strong company.
The
question with Silgan, though, is the extent to which it can adapt with
the times. As food producers have switched from glass to plastic, I
expect the same to happen over time with metal. While Silgan can offset
some of that with expansion into emerging markets, I have to ask whether
the company also needs to grow beyond metal cans to maintain its
long-term earnings power.
Please continue here:
http://www.investopedia.com/stock-analysis/2012/Can-Silgan-Balance-Ongoing-Returns-Of-Capital-With-Building-For-The-Future-SLGN-BLL-CCK-BERY1228.aspx
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