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 ten 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) sales are leveraged to an improving US economy,
(3) its ongoing
restructuring efforts to reduce costs and improve productivity,
(4) debt
reduction.
Negatives
(1) rising costs
of raw materials,
(2) weak EU
economy,
Sonoco is rated
A by Value Line, has a 37% debt to equity ratio, has raised its dividend for 27
consecutive years and its stock yields 3.0%.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Chart
Note:
SON stock made great progress off its March 2009 low, surpassing the downtrend
off its July 2007 high (straight red line) and the November 2008 trading high
(green line). Long term, the stock is in
an uptrend (blue lines). Intermediate
term, it is in an uptrend (purple lines).
Short term, it is in an uptrend (brown line). The wiggly red line is the 50 day moving
average. The High Yield Portfolio owns a
50% position in SON. The upper boundary
of its Buy Value Range is $22; the lower boundary of its Sell Half Range is
$48.
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