Ranpak (NYSE:PACK) versus Karat Packaging (NASDAQ:KRT) Head-To-Head Review

Ranpak (NYSE:PACK) and Karat Packaging (NASDAQ:KRT) are both small-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Ranpak and Karat Packaging’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ranpak	-5.74%	-3.87%	-1.92%
Karat Packaging	7.02%	19.47%	10.33%

Risk & Volatility

Ranpak has a beta of 2.69, meaning that its stock price is 169% more volatile than the S&P 500. Comparatively, Karat Packaging has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Ranpak and Karat Packaging, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranpak	0	2	1	0	2.33
Karat Packaging	0	2	1	0	2.33

Ranpak currently has a consensus price target of $5.50, indicating a potential upside of 37.50%. Karat Packaging has a consensus price target of $33.50, indicating a potential upside of 22.04%. Given Ranpak’s higher possible upside, equities research analysts plainly believe Ranpak is more favorable than Karat Packaging.

Institutional & Insider Ownership

85.9% of Ranpak shares are held by institutional investors. Comparatively, 25.2% of Karat Packaging shares are held by institutional investors. 8.7% of Ranpak shares are held by insiders. Comparatively, 66.2% of Karat Packaging shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Ranpak and Karat Packaging”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranpak	$368.90 million	0.91	-$21.50 million	($0.26)	-15.38
Karat Packaging	$422.63 million	1.30	$29.98 million	$1.50	18.30

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

Summary

Karat Packaging beats Ranpak on 9 of the 12 factors compared between the two stocks.

About Ranpak

Ranpak Holdings Corp., together with its subsidiaries, provides product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains in North America, Europe, and Asia. The company offers protective packaging solutions, such as void-fill protective systems that convert paper to fill empty spaces in secondary packages and protect objects under the FillPak brand; cushioning protective systems, which convert paper into cushioning pads under the PadPak brand; and wrapping protective systems that create pads or paper mesh to wrap and protect fragile items, as well as to line boxes and provide separation when shipping various objects under the WrapPak, Geami, and ReadyRoll brands, as well as cold chain products, which are used to provide insulation for goods. It also offers end-of-line packaging automation products, which help end users automate the void filling and box closure processes after product packing is complete. The company sells its products to end users primarily through a distributor network, and directly to select end-users. Ranpak Holdings Corp. was founded in 1972 and is headquartered in Concord Township, Ohio.

About Karat Packaging

Karat Packaging Inc., together with its subsidiaries, engages in the manufacture and distribution of single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company also provides new product development, design, printing, and logistics services. It offers its products to national and regional distributors, restaurant chains, retail establishments, and online customers. The company was founded in 2000 and is based in Chino, California.