Sonoco Products
Co is a leading producer of paper-based tubes and cores, flexible packaging,
rigid plastic containers, cylinder paperboard, composite cans, protective
partitions, wire and cable reels and point of purchase displays. The company has grown profits and dividends
at a 3-4% pace over the last five years earning a 13-15% return on equity. The company should improve its earnings growth
rate as a result of:
(1) new product innovation. SON has
raised the amount of capital spending dedicated to new product opportunities,
(2) acquisitions,
(3) its ongoing
restructuring efforts to reduce costs and improve productivity.
Negatives
(1) rising costs
of raw materials,
(2) lower volume
in some product sectors,
(3) a major
segment of its business is dependent on the housing industry.
Sonoco is rated
A by Value Line, has a 47% debt to equity ratio, has raised its dividend for 27
consecutive years and its stock yields 4.0%.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2003
Debt/ EPS Down Net Value Line
Equity ROE Since 2003 Margin Rating
Chart
Note: SON stock
made good initial progress off its March 2009 low, surpassing the downtrend off
its June 2007 high (red line) and the November 2008 trading high (green
line). Long term, SON
is in an uptrend (straight blue lines).
Intermediate term, it is in a trading range (purple lines). The wiggly blue line is on balance
volume. The High Yield Portfolio owns a
60% position in SON . The upper boundary of its Buy
Value Range Sell
Half Range
01/13
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