SONOCO PRODUCTS CO (SON) Stock Fundamental Analysis
NYSE:SON - New York Stock Exchange, Inc. - US8354951027 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to SON. SON was compared to 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 is not valued too expensively and it also shows a decent 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.
SON had positive earnings in 4 of the past 5 years.
Each year in the past 5 years SON had a positive operating cash flow.
1.2 Ratios
The Return On Assets of SON (1.21%) is worse than 63.64% of its industry peers.
With a Return On Equity value of 6.26%, SON perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
SON has a Return On Invested Capital (5.40%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years 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 in line with its industry peers.
SON's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 10.47%, SON is doing good in 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.
SON has a Gross Margin (21.49%) which is comparable to the rest of the 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
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.
Compared to 5 years ago, SON has less shares outstanding
Compared to 1 year ago, SON has a worse debt to assets ratio.
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.
The Altman-Z score of SON (1.05) is worse than 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.
SON's Debt to FCF ratio of 118.61 is on the low side compared to the rest of the industry. SON is outperformed by 68.18% of its industry peers.
SON has a Debt/Equity ratio of 2.03. This is a high value indicating a heavy dependency on external 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 | 1.05 |
ROIC/WACC0.83
WACC6.48%
2.3 Liquidity
A Current Ratio of 0.80 indicates that SON may have some problems paying its short term obligations.
With a Current ratio value of 0.80, SON is not doing good in the industry: 86.36% of the companies in the same industry are doing better.
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.
Looking at the last year, SON shows a very negative growth in Revenue. The Revenue has decreased by -19.61% in the last year.
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 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
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
Based on the Price/Earnings ratio of 9.00, the valuation of SON can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of SON indicates a rather cheap valuation: SON is cheaper than 95.45% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.29, SON is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.02, 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.
SON is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9 | ||
| Fwd PE | 7.02 |
4.2 Price Multiples
SON's Enterprise Value to EBITDA ratio is in line with the industry average.
SON's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. SON is more expensive than 68.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 76.09 | ||
| EV/EBITDA | 11.89 |
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)1.32
EPS Next 2Y16.18%
EPS Next 3Y12.62%
5. Dividend
5.1 Amount
SON has a Yearly Dividend Yield of 4.56%, which is a nice return.
Compared to an average industry Dividend Yield of 2.90, SON pays a better dividend. On top of this SON pays more dividend than 90.91% 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 2.37.
| 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 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)4.02%
Div Incr Years26
Div Non Decr Years26
5.3 Sustainability
SON pays out 133.57% of its income as dividend. 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 2Y16.18%
EPS Next 3Y12.62%
46.35
-0.16 (-0.34%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners83.96%
Inst Owner Change0%
Ins Owners0.37%
Ins Owner Change12.07%
Market Cap4.57B
Analysts80
Price Target57.46 (23.97%)
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 | ||
| Fwd PE | 7.02 | ||
| P/S | 0.85 | ||
| P/FCF | 76.09 | ||
| P/OCF | 9.95 | ||
| P/B | 1.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.89 |
EPS(TTM)5.15
EY11.11%
EPS(NY)6.6
Fwd EY14.24%
FCF(TTM)0.61
FCFY1.31%
OCF(TTM)4.66
OCFY10.05%
SpS54.52
BVpS24.82
TBVpS-28.03
PEG (NY)0.38
PEG (5Y)1.32
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
WACC6.48%
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%