High Debt And No Dividend, But Crown Holdings Might Just Be A Buy

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About: Crown Holdings, Inc. (CCK)
by: Vanaheimr Capital
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Vanaheimr Capital
Value, long-term horizon, long/short equity, dividend investing
Summary

The acquisition of Signode improved profit margins, cash flow, and revenue growth while reducing capital expenditure requirements.

The debt burden is high but Crown's free cash flow is more than enough to help with deleveraging.

Crown is a company that should pay a dividend, and we hope they consider instituting one after deleveraging from the Signode acquisition.

This type of business has a natural barrier to entry given the difficulty and cost associated with establishing and operating plants in virtually every country around the world.

Investment Thesis

We think Crown Holdings' (CCK) plan to pay down debt through 2020 and reduce costs by integrating their Signode acquisition will lead to a much more profitable business over the long