Sonoco (NYSE: SON) and Packaging Co. of America (NYSE:PKG) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.
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This is a breakdown of recent ratings for Sonoco and Packaging Co. of America, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Packaging Co. of America||0||6||6||0||2.50|
Sonoco presently has a consensus target price of $53.67, indicating a potential upside of 3.32%. Packaging Co. of America has a consensus target price of $128.64, indicating a potential upside of 12.69%. Given Packaging Co. of America’s stronger consensus rating and higher possible upside, analysts plainly believe Packaging Co. of America is more favorable than Sonoco.
Insider & Institutional Ownership
70.7% of Sonoco shares are owned by institutional investors. Comparatively, 88.9% of Packaging Co. of America shares are owned by institutional investors. 1.7% of Sonoco shares are owned by company insiders. Comparatively, 1.3% of Packaging Co. of America shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility & Risk
Sonoco has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Packaging Co. of America has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500.
Sonoco pays an annual dividend of $1.56 per share and has a dividend yield of 3.0%. Packaging Co. of America pays an annual dividend of $2.52 per share and has a dividend yield of 2.2%. Sonoco pays out 55.9% of its earnings in the form of a dividend. Packaging Co. of America pays out 41.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sonoco has increased its dividend for 37 consecutive years and Packaging Co. of America has increased its dividend for 7 consecutive years. Sonoco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Sonoco and Packaging Co. of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Packaging Co. of America||10.48%||29.15%||9.85%|
Valuation & Earnings
This table compares Sonoco and Packaging Co. of America’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sonoco||$5.04 billion||1.03||$175.34 million||$2.79||18.62|
|Packaging Co. of America||$6.44 billion||1.67||$668.60 million||$6.02||18.96|
Packaging Co. of America has higher revenue and earnings than Sonoco. Sonoco is trading at a lower price-to-earnings ratio than Packaging Co. of America, indicating that it is currently the more affordable of the two stocks.
Packaging Co. of America beats Sonoco on 13 of the 17 factors compared between the two stocks.
Sonoco Products Company manufactures and sells industrial and consumer packaging products in North and South America, Europe, Australia, and Asia. The company operates through four segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. The Consumer Packaging segment offers composite and thermoformed plastic round and shaped rigid containers and trays; extruded and injection-molded plastic products; printed flexible packaging products; brand artwork management; and metal and peelable membrane ends and closures. The Display and Packaging segment offers point-of-purchase displays; supply chain management services comprising contract packing, fulfillment, and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters, and heat sealing equipment; and paper amenities, such as coasters and glass covers. The Paper and Industrial Converted Products segment provides paperboard tubes and cores; fiber-based construction tubes and forms; wooden, metal, and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper, and material recycling services. The Protective Solutions segment provides custom-engineered, paperboard-based, and expanded foam protective packaging and components; and temperature-assured packaging products. The company sells its products in various markets, which include paper, textile, film, food, chemical, packaging, construction, and wire and cable. Sonoco Products Company was founded in 1899 and is headquartered in Hartsville, South Carolina.
About Packaging Co. of America
Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products primarily in the United States. The company's Packaging segment offers various corrugated packaging products, such as conventional shipping containers used to protect and transport manufactured goods; multi-color boxes and displays that help to merchandise the packaged product in retail locations; and honeycomb protective packaging products. It also produces packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. This segment sells its corrugated products through a direct sales and marketing organization, independent brokers, and distribution partners. Its Paper segment manufactures and sells white papers comprising commodity and specialty papers with various features, such as colors, coatings, high brightness, and recycled content. The white papers also consist of communication papers, including cut-size office papers, and printing and converting papers; and pressure sensitive papers, such as release liners that are used to produce labels for use in consumer and commercially-packaged products. This segment sells white papers through the company's own sales personnel. Packaging Corporation of America was founded in 1867 and is headquartered in Lake Forest, Illinois.