SONOCO PRODUCTS CO (SON) Stock Fundamental Analysis
NYSE:SON - New York Stock Exchange, Inc. - US8354951027 - Common Stock - Currency: USD
SON gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 22 industry peers in the Containers & Packaging industry. SON has a medium profitability rating, but doesn't score so well on its financial health evaluation. SON has a correct valuation and a medium growth rate. SON also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
SON had positive earnings in the past year.
In the past year SON had a positive cash flow from operations.
Of the past 5 years SON 4 years were profitable.
SON had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SON's Return On Assets of 1.21% is on the low side compared to the rest of the industry. SON is outperformed by 63.64% of its industry peers.
The Return On Equity of SON (6.26%) is comparable to the rest of the industry.
With a Return On Invested Capital value of 5.40%, SON perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SON is in line with the industry average of 7.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.21% | ||
| ROE | 6.26% | ||
| ROIC | 5.4% |
ROA(3y)4.84%
ROA(5y)3.36%
ROE(3y)16.46%
ROE(5y)11.13%
ROIC(3y)8.06%
ROIC(5y)9.38%
1.3 Margins
SON has a Profit Margin (2.85%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of SON has declined.
Looking at the Operating Margin, with a value of 10.47%, SON is in the better half of the industry, outperforming 68.18% of the companies in the same industry.
SON's Operating Margin has been stable in the last couple of years.
The Gross Margin of SON (21.49%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of SON has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.47% | ||
| PM (TTM) | 2.85% | ||
| GM | 21.49% |
OM growth 3Y2.99%
OM growth 5Y0.48%
PM growth 3YN/A
PM growth 5Y-10.66%
GM growth 3Y4.17%
GM growth 5Y1.76%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SON is still creating some value.
SON has more shares outstanding than it did 1 year ago.
The number of shares outstanding for SON has been reduced compared to 5 years ago.
SON has a worse debt/assets ratio than last year.
2.2 Solvency
SON has an Altman-Z score of 1.04. This is a bad value and indicates that SON is not financially healthy and even has some risk of bankruptcy.
SON has a Altman-Z score of 1.04. This is in the lower half of the industry: SON underperforms 77.27% of its industry peers.
The Debt to FCF ratio of SON is 118.61, which is on the high side as it means it would take SON, 118.61 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of SON (118.61) is worse than 68.18% of its industry peers.
A Debt/Equity ratio of 2.03 is on the high side and indicates that SON has dependencies on debt financing.
SON's Debt to Equity ratio of 2.03 is on the low side compared to the rest of the industry. SON is outperformed by 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 118.61 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.76
WACC7.15%
2.3 Liquidity
SON has a Current Ratio of 0.80. This is a bad value and indicates that SON is not financially healthy enough and could expect problems in meeting its short term obligations.
SON's Current ratio of 0.80 is on the low side compared to the rest of the industry. SON is outperformed by 86.36% of its industry peers.
A Quick Ratio of 0.51 indicates that SON may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.51, SON is doing worse than 86.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.41% over the past year.
The Earnings Per Share has been growing slightly by 6.80% on average over the past years.
The Revenue for SON has decreased by -19.61% in the past year. This is quite bad
SON shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.26% yearly.
EPS 1Y (TTM)3.41%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%23.21%
Revenue 1Y (TTM)-19.61%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%4.38%
3.2 Future
SON is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.12% yearly.
The Revenue is expected to grow by 6.05% on average over the next years.
EPS Next Y24.1%
EPS Next 2Y16.37%
EPS Next 3Y12.86%
EPS Next 5Y9.12%
Revenue Next Year15.28%
Revenue Next 2Y7.71%
Revenue Next 3Y6.63%
Revenue Next 5Y6.05%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 8.62, the valuation of SON can be described as very reasonable.
Based on the Price/Earnings ratio, SON is valued cheaply inside the industry as 95.45% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.32, SON is valued rather cheaply.
A Price/Forward Earnings ratio of 6.71 indicates a rather cheap valuation of SON.
Based on the Price/Forward Earnings ratio, SON is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.13. SON is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.62 | ||
| Fwd PE | 6.71 |
4.2 Price Multiples
SON's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SON indicates a slightly more expensive valuation: SON is more expensive than 68.18% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 72.89 | ||
| EV/EBITDA | 11.69 |
4.3 Compensation for Growth
SON's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as SON's earnings are expected to grow with 12.86% in the coming years.
PEG (NY)0.36
PEG (5Y)1.27
EPS Next 2Y16.37%
EPS Next 3Y12.86%
5. Dividend
5.1 Amount
SON has a Yearly Dividend Yield of 4.65%, which is a nice return.
SON's Dividend Yield is rather good when compared to the industry average which is at 3.07. SON pays more dividend than 90.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, SON pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.65% |
5.2 History
The dividend of SON has a limited annual growth rate of 4.02%.
SON has been paying a dividend for at least 10 years, so it has a reliable track record.
SON has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.02%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
133.57% of the earnings are spent on dividend by SON. This is not a sustainable payout ratio.
SON's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP133.57%
EPS Next 2Y16.37%
EPS Next 3Y12.86%
44.4
-1.24 (-2.72%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners83.96%
Inst Owner Change3.01%
Ins Owners0.37%
Ins Owner Change11.88%
Market Cap4.38B
Analysts81.43
Price Target58.52 (31.8%)
Short Float %3.74%
Short Ratio4.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.65% |
Yearly Dividend2.07
Dividend Growth(5Y)4.02%
DP133.57%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-10.74%
Min EPS beat(2)-17.56%
Max EPS beat(2)-3.91%
EPS beat(4)2
Avg EPS beat(4)-4.36%
Min EPS beat(4)-17.56%
Max EPS beat(4)2.37%
EPS beat(8)4
Avg EPS beat(8)-0.62%
EPS beat(12)8
Avg EPS beat(12)2.38%
EPS beat(16)11
Avg EPS beat(16)2.04%
Revenue beat(2)0
Avg Revenue beat(2)-18.18%
Min Revenue beat(2)-19.38%
Max Revenue beat(2)-16.99%
Revenue beat(4)0
Avg Revenue beat(4)-11.17%
Min Revenue beat(4)-19.38%
Max Revenue beat(4)-3.46%
Revenue beat(8)1
Avg Revenue beat(8)-7.41%
Revenue beat(12)1
Avg Revenue beat(12)-6.25%
Revenue beat(16)5
Avg Revenue beat(16)-4.12%
PT rev (1m)2.23%
PT rev (3m)1.94%
EPS NQ rev (1m)-1.7%
EPS NQ rev (3m)-0.88%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.84%
Revenue NQ rev (1m)-1.12%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)-1.56%
Revenue NY rev (3m)-2.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.62 | ||
| Fwd PE | 6.71 | ||
| P/S | 0.81 | ||
| P/FCF | 72.89 | ||
| P/OCF | 9.53 | ||
| P/B | 1.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.69 |
EPS(TTM)5.15
EY11.6%
EPS(NY)6.62
Fwd EY14.91%
FCF(TTM)0.61
FCFY1.37%
OCF(TTM)4.66
OCFY10.49%
SpS54.52
BVpS24.82
TBVpS-28.03
PEG (NY)0.36
PEG (5Y)1.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.21% | ||
| ROE | 6.26% | ||
| ROCE | 6.47% | ||
| ROIC | 5.4% | ||
| ROICexc | 5.51% | ||
| ROICexgc | 14.22% | ||
| OM | 10.47% | ||
| PM (TTM) | 2.85% | ||
| GM | 21.49% | ||
| FCFM | 1.12% |
ROA(3y)4.84%
ROA(5y)3.36%
ROE(3y)16.46%
ROE(5y)11.13%
ROIC(3y)8.06%
ROIC(5y)9.38%
ROICexc(3y)8.38%
ROICexc(5y)10.09%
ROICexgc(3y)16.5%
ROICexgc(5y)19.85%
ROCE(3y)9.66%
ROCE(5y)11.51%
ROICexcg growth 3Y-9.06%
ROICexcg growth 5Y-7.04%
ROICexc growth 3Y-21.68%
ROICexc growth 5Y-13.61%
OM growth 3Y2.99%
OM growth 5Y0.48%
PM growth 3YN/A
PM growth 5Y-10.66%
GM growth 3Y4.17%
GM growth 5Y1.76%
F-Score5
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 118.61 | ||
| Debt/EBITDA | 5.14 | ||
| Cap/Depr | 98.43% | ||
| Cap/Sales | 7.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 47.45% | ||
| Profit Quality | 39.22% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.51 | ||
| Altman-Z | 1.04 |
F-Score5
WACC7.15%
ROIC/WACC0.76
Cap/Depr(3y)105.95%
Cap/Depr(5y)100.18%
Cap/Sales(3y)6.57%
Cap/Sales(5y)5.6%
Profit Quality(3y)138.95%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.41%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%23.21%
EPS Next Y24.1%
EPS Next 2Y16.37%
EPS Next 3Y12.86%
EPS Next 5Y9.12%
Revenue 1Y (TTM)-19.61%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%4.38%
Revenue Next Year15.28%
Revenue Next 2Y7.71%
Revenue Next 3Y6.63%
Revenue Next 5Y6.05%
EBIT growth 1Y-16.37%
EBIT growth 3Y1.21%
EBIT growth 5Y0.22%
EBIT Next Year77.79%
EBIT Next 3Y24.68%
EBIT Next 5Y14.91%
FCF growth 1Y-77.01%
FCF growth 3Y117.79%
FCF growth 5Y13.88%
OCF growth 1Y-24.17%
OCF growth 3Y40.81%
OCF growth 5Y14.38%