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 24 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 cheap, but on the other hand it scores bad on growth. SON also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year SON was profitable.
SON had a positive operating cash flow in the past year.
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
SON has a worse Return On Assets (1.31%) than 69.57% of its industry peers.
Looking at the Return On Equity, with a value of 7.17%, SON is in line with its industry, outperforming 47.83% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.69%, SON is doing worse than 69.57% 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 7.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.31% | ||
| ROE | 7.17% | ||
| ROIC | 5.69% |
ROA(3y)4.84%
ROA(5y)3.36%
ROE(3y)16.45%
ROE(5y)11.12%
ROIC(3y)7.97%
ROIC(5y)9.33%
1.3 Margins
SON has a Profit Margin of 2.60%. This is comparable to the rest of the industry: SON outperforms 43.48% of its industry peers.
In the last couple of years the Profit Margin of SON has declined.
Looking at the Operating Margin, with a value of 9.16%, SON is in line with its industry, outperforming 52.17% of the companies in the same industry.
SON's Operating Margin has declined in the last couple of years.
SON has a Gross Margin (21.22%) which is in line with its industry peers.
SON's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.16% | ||
| PM (TTM) | 2.6% | ||
| GM | 21.22% |
OM growth 3Y-5.67%
OM growth 5Y-4.68%
PM growth 3YN/A
PM growth 5Y-10.66%
GM growth 3Y4.17%
GM growth 5Y1.76%
2. Health
2.1 Basic Checks
SON has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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.
Compared to 1 year ago, SON has a worse debt to assets ratio.
2.2 Solvency
SON has a debt to FCF ratio of 15.43. This is a negative value and a sign of low solvency as SON would need 15.43 years to pay back of all of its debts.
SON has a Debt to FCF ratio (15.43) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.18 is on the high side and indicates that SON has dependencies on debt financing.
SON has a worse Debt to Equity ratio (2.18) than 69.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.18 | ||
| Debt/FCF | 15.43 | ||
| Altman-Z | N/A |
ROIC/WACC0.82
WACC6.95%
2.3 Liquidity
A Current Ratio of 0.79 indicates that SON may have some problems paying its short term obligations.
SON has a Current ratio of 0.79. This is amonst the worse of the industry: SON underperforms 91.30% of its industry peers.
SON has a Quick Ratio of 0.79. 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 has a worse Quick ratio (0.54) than 91.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
The earnings per share for SON have decreased by -7.03% in the last year.
The Earnings Per Share has been growing slightly by 6.80% on average over the past years.
The Revenue has decreased by -7.09% in the past year.
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)-7.03%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%-1.96%
Revenue 1Y (TTM)-7.09%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%-16.66%
3.2 Future
SON is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.99% yearly.
SON is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.70% yearly.
EPS Next Y25.15%
EPS Next 2Y17.31%
EPS Next 3Y14.14%
EPS Next 5Y5.99%
Revenue Next Year21.58%
Revenue Next 2Y12.3%
Revenue Next 3Y4.77%
Revenue Next 5Y7.7%
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 stable.
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
A Price/Earnings ratio of 9.67 indicates a reasonable valuation of SON.
Based on the Price/Earnings ratio, SON is valued cheaply inside the industry as 91.30% of the companies are valued more expensively.
SON's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.98.
Based on the Price/Forward Earnings ratio of 7.73, 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's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.66.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.67 | ||
| Fwd PE | 7.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SON is valued a bit more expensive than the industry average as 65.22% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SON indicates a rather cheap valuation: SON is cheaper than 86.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.18 | ||
| EV/EBITDA | 11.88 |
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 14.14% in the coming years.
PEG (NY)0.38
PEG (5Y)1.42
EPS Next 2Y17.31%
EPS Next 3Y14.14%
5. Dividend
5.1 Amount
SON has a Yearly Dividend Yield of 4.47%, which is a nice return.
SON's Dividend Yield is rather good when compared to the industry average which is at 3.14. SON pays more dividend than 86.96% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, SON pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
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
124.12% 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.
DP124.12%
EPS Next 2Y17.31%
EPS Next 3Y14.14%
47.28
-0.54 (-1.13%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners82.65%
Inst Owner Change1.63%
Ins Owners0.27%
Ins Owner Change9.22%
Market Cap4.65B
Analysts76.92
Price Target61.49 (30.05%)
Short Float %2.75%
Short Ratio3.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
Yearly Dividend2.07
Dividend Growth(5Y)4.02%
DP124.12%
Div Incr Years26
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.94%
Min EPS beat(2)-17.56%
Max EPS beat(2)1.68%
EPS beat(4)3
Avg EPS beat(4)-1.93%
Min EPS beat(4)-17.56%
Max EPS beat(4)5.77%
EPS beat(8)5
Avg EPS beat(8)0.5%
EPS beat(12)9
Avg EPS beat(12)3.24%
EPS beat(16)12
Avg EPS beat(16)2.58%
Revenue beat(2)0
Avg Revenue beat(2)-11.42%
Min Revenue beat(2)-19.38%
Max Revenue beat(2)-3.46%
Revenue beat(4)0
Avg Revenue beat(4)-7.73%
Min Revenue beat(4)-19.38%
Max Revenue beat(4)-3.22%
Revenue beat(8)1
Avg Revenue beat(8)-6.19%
Revenue beat(12)2
Avg Revenue beat(12)-4.75%
Revenue beat(16)6
Avg Revenue beat(16)-3%
PT rev (1m)0%
PT rev (3m)1.89%
EPS NQ rev (1m)11.75%
EPS NQ rev (3m)16.7%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)13.25%
Revenue NQ rev (1m)8.81%
Revenue NQ rev (3m)24.42%
Revenue NY rev (1m)4.59%
Revenue NY rev (3m)22.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.67 | ||
| Fwd PE | 7.73 | ||
| P/S | 0.74 | ||
| P/FCF | 10.18 | ||
| P/OCF | 5.57 | ||
| P/B | 2.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.88 |
EPS(TTM)4.89
EY10.34%
EPS(NY)6.12
Fwd EY12.94%
FCF(TTM)4.64
FCFY9.82%
OCF(TTM)8.49
OCFY17.95%
SpS64.12
BVpS23.27
TBVpS-28.76
PEG (NY)0.38
PEG (5Y)1.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.31% | ||
| ROE | 7.17% | ||
| ROCE | 6.82% | ||
| ROIC | 5.69% | ||
| ROICexc | 5.99% | ||
| ROICexgc | 16.46% | ||
| OM | 9.16% | ||
| PM (TTM) | 2.6% | ||
| GM | 21.22% | ||
| FCFM | 7.24% |
ROA(3y)4.84%
ROA(5y)3.36%
ROE(3y)16.45%
ROE(5y)11.12%
ROIC(3y)7.97%
ROIC(5y)9.33%
ROICexc(3y)8.29%
ROICexc(5y)10.03%
ROICexgc(3y)16.81%
ROICexgc(5y)20.04%
ROCE(3y)9.55%
ROCE(5y)11.45%
ROICexcg growth 3Y-16.7%
ROICexcg growth 5Y-11.81%
ROICexc growth 3Y-28.26%
ROICexc growth 5Y-18.04%
OM growth 3Y-5.67%
OM growth 5Y-4.68%
PM growth 3YN/A
PM growth 5Y-10.66%
GM growth 3Y4.17%
GM growth 5Y1.76%
F-Score6
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.18 | ||
| Debt/FCF | 15.43 | ||
| Debt/EBITDA | 5.24 | ||
| Cap/Depr | 100.73% | ||
| Cap/Sales | 5.99% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.57% | ||
| Profit Quality | 278.29% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.54 | ||
| Altman-Z | N/A |
F-Score6
WACC6.95%
ROIC/WACC0.82
Cap/Depr(3y)104.56%
Cap/Depr(5y)99.35%
Cap/Sales(3y)6.11%
Cap/Sales(5y)5.32%
Profit Quality(3y)142.13%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-7.03%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%-1.96%
EPS Next Y25.15%
EPS Next 2Y17.31%
EPS Next 3Y14.14%
EPS Next 5Y5.99%
Revenue 1Y (TTM)-7.09%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%-16.66%
Revenue Next Year21.58%
Revenue Next 2Y12.3%
Revenue Next 3Y4.77%
Revenue Next 5Y7.7%
EBIT growth 1Y-19.23%
EBIT growth 3Y-7.3%
EBIT growth 5Y-4.92%
EBIT Next Year82.61%
EBIT Next 3Y15.98%
EBIT Next 5Y16.88%
FCF growth 1Y-12.23%
FCF growth 3Y120.34%
FCF growth 5Y14.68%
OCF growth 1Y-5.56%
OCF growth 3Y40.81%
OCF growth 5Y14.38%