Besides being dominant and in demand, Crown is a low-cost producer. In its beverage can segment, for example, which accounts for 50% of revenue, costs are contained through long-term sales contracts that shift aluminum price increases to customers. Operating margins in this segment have historically been strong - 13% to 14% for the past several years, despite a sour global economy.

Risks to Consider: Because Crown's products compete with glass and plastic containers, substitution is an important risk to consider when owning this stock. For instance, beer drinkers have been increasingly shifting to products packaged in glass bottles rather than aluminum cans. As a result, about half of all beers are now sold in bottles, compared with around 40% a decade ago.

Action to Take. I don't see substitution becoming a significant problem for at least the short-to-intermediate term (and maybe not at all). Analysts project earnings growth averaging 13.5% for the next three to five years, very brisk despite being quite a bit slower than the 34% growth rate of the prior five years. Sales are expected to expand 5.5% a year, a noticeable improvement compared with the 4% growth rate Crown posted during the previous five years.

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