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SONOCO PRODUCTS CO

New York Stock Exchange, Inc. / Materials / Containers & Packaging

Fundamental Rating

5

Overall SON gets a fundamental rating of 5 out of 10. We evaluated SON against 24 industry peers in the Containers & Packaging industry. SON has only an average score on both its financial health and profitability. SON is valued quite cheap, but it does not seem to be growing. Finally SON also has an excellent dividend rating. These ratings would make SON suitable for value and dividend investing!


Dividend Valuation Growth Profitability Health

5

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.
The reported net income has been mixed in the past 5 years: SON reported negative net income in multiple years.
SON had a positive operating cash flow in 4 of the past 5 years.
SON Yearly Net Income VS EBIT VS OCF VS FCFSON Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M 600M 800M

1.2 Ratios

With a Return On Assets value of 3.19%, SON perfoms like the industry average, outperforming 52.17% of the companies in the same industry.
SON has a Return On Equity of 11.62%. This is comparable to the rest of the industry: SON outperforms 47.83% of its industry peers.
The Return On Invested Capital of SON (6.87%) is comparable to the rest of the industry.
SON had an Average Return On Invested Capital over the past 3 years of 10.26%. This is above the industry average of 7.64%.
Industry RankSector Rank
ROA 3.19%
ROE 11.62%
ROIC 6.87%
ROA(3y)3.84%
ROA(5y)4.23%
ROE(3y)12.51%
ROE(5y)12.93%
ROIC(3y)10.26%
ROIC(5y)10.4%
SON Yearly ROA, ROE, ROICSON Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5 10 15 20

1.3 Margins

With a Profit Margin value of 4.38%, SON perfoms like the industry average, outperforming 56.52% of the companies in the same industry.
In the last couple of years the Profit Margin of SON has grown nicely.
With a decent Operating Margin value of 9.93%, SON is doing good in the industry, outperforming 65.22% of the companies in the same industry.
In the last couple of years the Operating Margin of SON has grown nicely.
SON has a Gross Margin (21.20%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of SON has grown nicely.
Industry RankSector Rank
OM 9.93%
PM (TTM) 4.38%
GM 21.2%
OM growth 3Y1.85%
OM growth 5Y2.92%
PM growth 3Y20.92%
PM growth 5Y3.78%
GM growth 3Y1.95%
GM growth 5Y1.86%
SON Yearly Profit, Operating, Gross MarginsSON Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5 10 15 20

5

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.
There is no outstanding debt for SON. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
SON Yearly Shares OutstandingSON Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M
SON Yearly Total Debt VS Total AssetsSON Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.2 Solvency

SON has an Altman-Z score of 2.10. This is not the best score and indicates that SON is in the grey zone with still only limited risk for bankruptcy at the moment.
SON has a better Altman-Z score (2.10) than 69.57% of its industry peers.
The Debt to FCF ratio of SON is 14.81, which is on the high side as it means it would take SON, 14.81 years of fcf income to pay off all of its debts.
SON has a Debt to FCF ratio (14.81) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.74 is on the high side and indicates that SON has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.74, SON is doing worse than 60.87% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.74
Debt/FCF 14.81
Altman-Z 2.1
ROIC/WACC1.02
WACC6.73%
SON Yearly LT Debt VS Equity VS FCFSON Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

2.3 Liquidity

SON has a Current Ratio of 2.36. This indicates that SON is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 2.36, SON belongs to the best of the industry, outperforming 91.30% of the companies in the same industry.
A Quick Ratio of 1.91 indicates that SON should not have too much problems paying its short term obligations.
SON has a Quick ratio of 1.91. This is amongst the best in the industry. SON outperforms 82.61% of its industry peers.
Industry RankSector Rank
Current Ratio 2.36
Quick Ratio 1.91
SON Yearly Current Assets VS Current LiabilitesSON Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

1

3. Growth

3.1 Past

SON shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.80%.
SON shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.53% yearly.
EPS 1Y (TTM)-3.8%
EPS 3Y12.54%
EPS 5Y7.53%
EPS Q2Q%14.71%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-16.66%

3.2 Future

The Earnings Per Share is expected to grow by 5.09% on average over the next years.
Based on estimates for the next years, SON will show a small growth in Revenue. The Revenue will grow by 7.70% on average per year.
EPS Next Y20.95%
EPS Next 2Y15.32%
EPS Next 3Y12.85%
EPS Next 5Y5.09%
Revenue Next Year21.58%
Revenue Next 2Y12.3%
Revenue Next 3Y4.77%
Revenue Next 5Y7.7%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
SON Yearly Revenue VS EstimatesSON Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2B 4B 6B 8B
SON Yearly EPS VS EstimatesSON Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 4 6

8

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 9.25 indicates a reasonable valuation of SON.
Compared to the rest of the industry, the Price/Earnings ratio of SON indicates a rather cheap valuation: SON is cheaper than 100.00% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. SON is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 7.65, the valuation of SON can be described as very cheap.
100.00% of the companies in the same industry are more expensive than SON, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.68. SON is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 9.25
Fwd PE 7.65
SON Price Earnings VS Forward Price EarningsSON Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

95.65% of the companies in the same industry are more expensive than SON, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, SON is valued a bit cheaper than the industry average as 73.91% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 14.2
EV/EBITDA 7.3
SON Per share dataSON EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

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.
SON's earnings are expected to grow with 12.85% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.44
PEG (5Y)1.23
EPS Next 2Y15.32%
EPS Next 3Y12.85%

8

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 4.50%, SON is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.14, SON pays a better dividend. On top of this SON pays more dividend than 86.96% of the companies listed in the same industry.
SON's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
Industry RankSector Rank
Dividend Yield 4.5%

5.2 History

The dividend of SON has a limited annual growth rate of 4.49%.
SON has paid a dividend for at least 10 years, which is 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)4.49%
Div Incr Years26
Div Non Decr Years26
SON Yearly Dividends per shareSON Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2

5.3 Sustainability

70.22% of the earnings are spent on dividend by SON. This is not a sustainable payout ratio.
SON's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP70.22%
EPS Next 2Y15.32%
EPS Next 3Y12.85%
SON Yearly Income VS Free CF VS DividendSON Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M
SON Dividend Payout.SON Dividend Payout, showing the Payout Ratio.SON Dividend Payout.PayoutRetained Earnings