Silgan Holdings Inc Valuation – August 2018 $SLGN

Company Profile (excerpt from Reuters): Silgan Holdings Inc., incorporated on April 6, 1989, is a holding company. The Company is a manufacturer of rigid packaging for consumer goods products. The Company operates in three business segments: metal containers, closures and plastic containers. Its metal container segment is engaged in the manufacture and sale of steel and aluminum containers for human and pet food and general line products. Its closures segment manufactures and sells metal, composite and plastic closures for food and beverage products. Its plastic containers segment manufactures and sells custom designed plastic containers and closures for personal care, food, healthcare, pharmaceutical, household and industrial chemical, pet care, agricultural, automotive and marine chemical products.

SLGN Chart

SLGN data by YCharts


Downloadable PDF version of this valuation:

ModernGraham Valuation of SLGN – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?


Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $2,993,661,141 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.26 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 69.90% Pass
6. Moderate PEmg Ratio PEmg < 20 14.85 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.66 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.26 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 3.08 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass


Stage 2: Determination of Intrinsic Value

EPSmg $1.85
MG Growth Estimate 6.01%
MG Value $38.02
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $26.86
MG Value based on 0% Growth $15.75
Market Implied Growth Rate 3.17%
Current Price $27.51
% of Intrinsic Value 72.36%

Silgan Holdings Inc. qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.32 in 2014 to an estimated $1.85 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.17% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Silgan Holdings Inc. revealed the company was trading above its Graham Number of $17.72. The company pays a dividend of $0.36 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 14.85, which was below the industry average of 21.21, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-22.36.

Silgan Holdings Inc. performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$22.36
Graham Number $17.72
PEmg 14.85
Current Ratio 2.26
PB Ratio 3.66
Current Dividend $0.36
Dividend Yield 1.31%
Number of Consecutive Years of Dividend Growth 14

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $1,726,800,000
Total Current Liabilities $765,000,000
Long-Term Debt $2,962,700,000
Total Assets $5,059,700,000
Intangible Assets $0
Total Liabilities $4,221,700,000
Shares Outstanding (Diluted Average) 111,574,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.01
Dec2017 $2.42
Dec2016 $1.27
Dec2015 $1.41
Dec2014 $1.43
Dec2013 $1.44
Dec2012 $1.09
Dec2011 $1.38
Dec2010 $0.95
Dec2009 $1.04
Dec2008 $0.82
Dec2007 $0.81
Dec2006 $0.69
Dec2005 $0.58
Dec2004 $0.57
Dec2003 $0.29
Dec2002 $0.37
Dec2001 $0.29
Dec2000 $0.22
Dec1999 $0.17
Dec1998 $0.29

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.85
Dec2017 $1.71
Dec2016 $1.35
Dec2015 $1.37
Dec2014 $1.32
Dec2013 $1.24
Dec2012 $1.11
Dec2011 $1.08
Dec2010 $0.91
Dec2009 $0.85
Dec2008 $0.74
Dec2007 $0.66
Dec2006 $0.56
Dec2005 $0.47
Dec2004 $0.39
Dec2003 $0.29
Dec2002 $0.28

Recommended Reading:

Other ModernGraham posts about the company

Silgan Holdings Inc Valuation – Initial Coverage $SLGN

Other ModernGraham posts about related companies

Clearwater Paper Corp Valuation – July 2018 $CLW
Intertape Polymer Group Valuation – July 2018 $TSE-ITP
Bemis Co Inc Valuation – June 2018 $BMS
Owens-Illinois Inc Valuation – June 2018 $OI
International Paper Co Valuation – June 2018 $IP
Ball Corporation Valuation – April 2018 $BLL
WestRock Co Valuation – April 2018 $WRK
Sealed Air Corp Valuation – April 2018 $SEE
Packaging Corp of America Valuation – Initial Coverage $PKG
AptarGroup Inc Valuation – Initial Coverage $ATR


The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.