SONOCO PRODUCTS CO (SON) Stock Fundamental Analysis
NYSE:SON - New York Stock Exchange, Inc. - US8354951027 - Common Stock - Currency: USD
Overall SON gets a fundamental rating of 4 out of 10. We evaluated SON against 22 industry peers in the Containers & Packaging industry. While SON is still in line with the averages on profitability rating, there are concerns on its financial health. SON has a decent growth rate and is not valued too expensively. Finally 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
The Return On Assets of SON (1.21%) is worse than 63.64% of its industry peers.
SON has a Return On Equity (6.26%) which is comparable to the rest of the industry.
SON has a Return On Invested Capital (5.40%) which is in line with its industry peers.
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 of 2.85%. This is comparable to the rest of the industry: SON outperforms 45.45% of its industry peers.
In the last couple of years the Profit Margin of SON has declined.
SON has a better Operating Margin (10.47%) than 68.18% of its industry peers.
In the last couple of years the Operating Margin of SON has remained more or less at the same level.
With a Gross Margin value of 21.49%, SON perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
SON's Gross Margin has improved in the last couple of years.
| 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
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.
SON has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.05, we must say that SON is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.05, SON is doing worse than 77.27% of the companies in the same industry.
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.
SON has a worse Debt to FCF ratio (118.61) 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 has a worse Debt to Equity ratio (2.03) than 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 118.61 | ||
| Altman-Z | 1.05 |
ROIC/WACC0.83
WACC6.47%
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
SON shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.41%.
SON shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.80% yearly.
SON shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -19.61%.
The Revenue has been decreasing by -0.26% on average over the past years.
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
The Earnings Per Share is expected to grow by 9.12% on average over the next years. This is quite good.
Based on estimates for the next years, SON will show a small growth in Revenue. The Revenue will grow by 6.05% on average per year.
EPS Next Y23.89%
EPS Next 2Y16.18%
EPS Next 3Y12.62%
EPS Next 5Y9.12%
Revenue Next Year15.39%
Revenue Next 2Y7.75%
Revenue Next 3Y6.49%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 9.03 indicates a reasonable valuation of SON.
Based on the Price/Earnings ratio, SON is valued cheaply inside the industry as 95.45% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of SON to the average of the S&P500 Index (27.45), we can say SON is valued rather cheaply.
The Price/Forward Earnings ratio is 7.05, which indicates a rather cheap valuation of SON.
Based on the Price/Forward Earnings ratio, SON is valued cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. SON is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.03 | ||
| Fwd PE | 7.05 |
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.
Based on the Price/Free Cash Flow ratio, SON is valued a bit more expensive than the industry average as 63.64% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 76.35 | ||
| EV/EBITDA | 11.91 |
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 12.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.38
PEG (5Y)1.33
EPS Next 2Y16.18%
EPS Next 3Y12.62%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.56%, SON is a good candidate for dividend investing.
SON's Dividend Yield is rather good when compared to the industry average which is at 2.90. SON pays more dividend than 90.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, SON pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
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
133.57% of the earnings are spent on dividend by SON. This is not a sustainable payout ratio.
The dividend of SON is growing, but earnings are growing more, so the dividend growth is sustainable.
DP133.57%
EPS Next 2Y16.18%
EPS Next 3Y12.62%
46.51
-0.14 (-0.3%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners83.96%
Inst Owner Change-52.59%
Ins Owners0.37%
Ins Owner Change11.88%
Market Cap4.59B
Analysts80
Price Target57.46 (23.54%)
Short Float %3.79%
Short Ratio4.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
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)0.37%
PT rev (3m)0.08%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)-1.77%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-0.09%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-2.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.03 | ||
| Fwd PE | 7.05 | ||
| P/S | 0.85 | ||
| P/FCF | 76.35 | ||
| P/OCF | 9.98 | ||
| P/B | 1.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.91 |
EPS(TTM)5.15
EY11.07%
EPS(NY)6.6
Fwd EY14.19%
FCF(TTM)0.61
FCFY1.31%
OCF(TTM)4.66
OCFY10.02%
SpS54.52
BVpS24.82
TBVpS-28.03
PEG (NY)0.38
PEG (5Y)1.33
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 | 1.05 |
F-Score5
WACC6.47%
ROIC/WACC0.83
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 Y23.89%
EPS Next 2Y16.18%
EPS Next 3Y12.62%
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 Year15.39%
Revenue Next 2Y7.75%
Revenue Next 3Y6.49%
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%