Silgan Holdings: The Free Cash Flow Is Accelerating

Summary

  • Silgan Holdings delivered record Q1 results, with adjusted EBIT and EPS at all-time highs, confirming my positive investment thesis.
  • The company expects robust free cash flow of $450M for 2025, translating to a 7.5% FCF yield at current share prices.
  • Strong cash flows make both the equity and the 2028 bond (offering a 5.1% yield) attractive investment opportunities.
  • While I currently have no position, I may write out-of-the-money puts, as Q2 results should further validate Silgan’s growth outlook.
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Amerikaanse vlag zwaaiend op pole met heldere levendige rode Whie en blauwe kleuren

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Introduction

As the packaging and packaging-related business is coming out of a few tough quarters (and years, since COVID), some companies are still trading at interesting valuations. Silgan Holdings (NYSE:SLGN) is a

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This article was written by

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The Investment Doctor is a financial writer, highlighting European small-caps with a 5-7 year investment horizon. He strongly believes a portfolio should consist of a mixture of dividend and growth stocks.

He is the leader of the investment group European Small Cap Ideas which offers exclusive access to actionable research on appealing Europe-focused investment opportunities not found elsewhere. The a focus is on high-quality ideas in the small-cap space, with emphasis on capital gains and dividend income for continuous cash flow. Features include: two model portfolios - the European Small Cap Ideas portfolio and the European REIT Portfolio, weekly updates, educational content to learn more about the European investing opportunities, and an active chat room to discuss the latest developments of the portfolio holdings. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While I may write out of the money put options, this is unlikely to happen in the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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