SONOCO PRODUCTS CO (SON) Stock Fundamental Analysis
NYSE:SON - New York Stock Exchange, Inc. - US8354951027 - Common Stock - Currency: USD
Taking everything into account, SON scores 5 out of 10 in our fundamental rating. SON was compared to 22 industry peers in the Containers & Packaging industry. There are concerns on the financial health of SON while its profitability can be described as average. SON scores decently on growth, while it is valued quite cheap. This could make an interesting combination. 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.
SON had positive earnings in 4 of the past 5 years.
In the past 5 years SON always reported a positive cash flow from operatings.
1.2 Ratios
SON's Return On Assets of 4.64% is amongst the best of the industry. SON outperforms 86.36% of its industry peers.
With a decent Return On Equity value of 17.18%, SON is doing good in the industry, outperforming 77.27% of the companies in the same industry.
SON's Return On Invested Capital of 5.10% is on the low side compared to the rest of the industry. SON is outperformed by 63.64% of its industry peers.
SON had an Average Return On Invested Capital over the past 3 years of 8.06%. This is in line with the industry average of 7.50%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.64% | ||
| ROE | 17.18% | ||
| ROIC | 5.1% |
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
The Profit Margin of SON (9.81%) is better than 90.91% of its industry peers.
In the last couple of years the Profit Margin of SON has declined.
The Operating Margin of SON (10.31%) is better than 63.64% of its industry peers.
SON's Operating Margin has been stable in the last couple of years.
SON's Gross Margin of 21.26% is in line compared to the rest of the industry. SON outperforms 54.55% of its industry peers.
SON's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.31% | ||
| PM (TTM) | 9.81% | ||
| GM | 21.26% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SON is creating some value.
Compared to 1 year ago, SON has more shares outstanding
SON has less shares outstanding than it did 5 years ago.
The debt/assets ratio for SON is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.35, we must say that SON is in the distress zone and has some risk of bankruptcy.
SON has a Altman-Z score of 1.35. This is in the lower half of the industry: SON underperforms 63.64% of its industry peers.
SON has a debt to FCF ratio of 38.01. This is a negative value and a sign of low solvency as SON would need 38.01 years to pay back of all of its debts.
SON has a Debt to FCF ratio (38.01) which is in line with its industry peers.
SON has a Debt/Equity ratio of 1.54. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SON (1.54) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.54 | ||
| Debt/FCF | 38.01 | ||
| Altman-Z | 1.35 |
ROIC/WACC0.81
WACC6.32%
2.3 Liquidity
A Current Ratio of 1.25 indicates that SON should not have too much problems paying its short term obligations.
SON has a Current ratio of 1.25. This is comparable to the rest of the industry: SON outperforms 40.91% of its industry peers.
SON has a Quick Ratio of 1.25. This is a bad value and indicates that SON is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of SON (0.72) is worse than 68.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.38% over the past year.
The Earnings Per Share has been growing slightly by 6.80% on average over the past years.
SON shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -14.28%.
Measured over the past years, SON shows a decrease in Revenue. The Revenue has been decreasing by -0.26% on average per year.
EPS 1Y (TTM)7.38%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%7.03%
Revenue 1Y (TTM)-14.28%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%17.68%
3.2 Future
Based on estimates for the next years, SON will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.12% on average per year.
SON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.05% yearly.
EPS Next Y23.89%
EPS Next 2Y16.02%
EPS Next 3Y12.62%
EPS Next 5Y9.12%
Revenue Next Year16.27%
Revenue Next 2Y8.22%
Revenue Next 3Y6.81%
Revenue Next 5Y6.05%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 8.66, the valuation of SON can be described as very reasonable.
Based on the Price/Earnings ratio, SON is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.99, SON is valued rather cheaply.
SON is valuated cheaply with a Price/Forward Earnings ratio of 6.89.
Based on the Price/Forward Earnings ratio, SON is valued cheaply inside the industry as 95.45% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of SON to the average of the S&P500 Index (36.36), we can say SON is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.66 | ||
| Fwd PE | 6.89 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SON is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as SON.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.37 | ||
| EV/EBITDA | 9.24 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SON has a very decent profitability rating, which may justify a higher PE ratio.
SON's earnings are expected to grow with 12.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.36
PEG (5Y)1.27
EPS Next 2Y16.02%
EPS Next 3Y12.62%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.70%, SON is a good candidate for dividend investing.
SON's Dividend Yield is rather good when compared to the industry average which is at 3.16. 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 | 4.7% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.02%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
37.02% of the earnings are spent on dividend by SON. This is a low number and sustainable payout ratio.
SON's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.02%
EPS Next 2Y16.02%
EPS Next 3Y12.62%
45.38
+0.52 (+1.16%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners83.96%
Inst Owner Change1.27%
Ins Owners0.37%
Ins Owner Change12.07%
Market Cap4.48B
Analysts80
Price Target57.57 (26.86%)
Short Float %4.41%
Short Ratio5.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.7% |
Yearly Dividend2.07
Dividend Growth(5Y)4.02%
DP37.02%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-5.26%
Min EPS beat(2)-6.6%
Max EPS beat(2)-3.91%
EPS beat(4)1
Avg EPS beat(4)-6.6%
Min EPS beat(4)-17.56%
Max EPS beat(4)1.68%
EPS beat(8)4
Avg EPS beat(8)-0.5%
EPS beat(12)7
Avg EPS beat(12)1.09%
EPS beat(16)11
Avg EPS beat(16)1.84%
Revenue beat(2)0
Avg Revenue beat(2)-8.87%
Min Revenue beat(2)-16.99%
Max Revenue beat(2)-0.76%
Revenue beat(4)0
Avg Revenue beat(4)-10.15%
Min Revenue beat(4)-19.38%
Max Revenue beat(4)-0.76%
Revenue beat(8)1
Avg Revenue beat(8)-6.34%
Revenue beat(12)1
Avg Revenue beat(12)-6.25%
Revenue beat(16)4
Avg Revenue beat(16)-4.5%
PT rev (1m)0.2%
PT rev (3m)1.83%
EPS NQ rev (1m)1.2%
EPS NQ rev (3m)0.65%
EPS NY rev (1m)0%
EPS NY rev (3m)1.93%
Revenue NQ rev (1m)0.96%
Revenue NQ rev (3m)1.01%
Revenue NY rev (1m)0.77%
Revenue NY rev (3m)-1.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.66 | ||
| Fwd PE | 6.89 | ||
| P/S | 0.79 | ||
| P/FCF | 31.37 | ||
| P/OCF | 8.23 | ||
| P/B | 1.38 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.24 |
EPS(TTM)5.24
EY11.55%
EPS(NY)6.58
Fwd EY14.5%
FCF(TTM)1.45
FCFY3.19%
OCF(TTM)5.51
OCFY12.15%
SpS57.43
BVpS32.8
TBVpS-22.28
PEG (NY)0.36
PEG (5Y)1.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.64% | ||
| ROE | 17.18% | ||
| ROCE | 6.12% | ||
| ROIC | 5.1% | ||
| ROICexc | 5.28% | ||
| ROICexgc | 12.87% | ||
| OM | 10.31% | ||
| PM (TTM) | 9.81% | ||
| GM | 21.26% | ||
| FCFM | 2.52% |
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-Score4
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.54 | ||
| Debt/FCF | 38.01 | ||
| Debt/EBITDA | 4.84 | ||
| Cap/Depr | 89.96% | ||
| Cap/Sales | 7.08% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 52.8% | ||
| Profit Quality | 25.67% | ||
| Current Ratio | 1.25 | ||
| Quick Ratio | 0.72 | ||
| Altman-Z | 1.35 |
F-Score4
WACC6.32%
ROIC/WACC0.81
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)7.38%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%7.03%
EPS Next Y23.89%
EPS Next 2Y16.02%
EPS Next 3Y12.62%
EPS Next 5Y9.12%
Revenue 1Y (TTM)-14.28%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%17.68%
Revenue Next Year16.27%
Revenue Next 2Y8.22%
Revenue Next 3Y6.81%
Revenue Next 5Y6.05%
EBIT growth 1Y-11.43%
EBIT growth 3Y1.21%
EBIT growth 5Y0.22%
EBIT Next Year77.79%
EBIT Next 3Y24.68%
EBIT Next 5Y14.91%
FCF growth 1Y-56.98%
FCF growth 3Y117.79%
FCF growth 5Y13.88%
OCF growth 1Y-19.23%
OCF growth 3Y40.81%
OCF growth 5Y14.38%