SONOCO PRODUCTS CO (SON) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SON - US8354951027 - Common Stock
47.46 USD
-0.67 (-1.39%)
47.46 USD
0 (0%)
SON gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals 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 is valued quite cheap, while showing a decent growth score. This is a good 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.
- Of the past 5 years SON 4 years were profitable.
- In the past 5 years SON always reported a positive cash flow from operatings.
1.2 Ratios
- SON has a Return On Assets of 5.36%. This is in the better half of the industry: SON outperforms 77.27% of its industry peers.
- SON has a better Return On Equity (19.00%) than 86.36% of its industry peers.
- The Return On Invested Capital of SON (6.37%) 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 7.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.36% | ||
| ROE | 19% | ||
| ROIC | 6.37% |
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 10.26%. This is amongst the best in the industry. SON outperforms 95.45% of its industry peers.
- SON's Profit Margin has declined in the last couple of years.
- SON has a better Operating Margin (10.36%) than 68.18% of its industry peers.
- SON's Operating Margin has been stable in the last couple of years.
- SON has a Gross Margin (21.46%) 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 | 10.36% | ||
| PM (TTM) | 10.26% | ||
| GM | 21.46% |
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
- SON has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- SON has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for SON has been reduced compared to 5 years ago.
- Compared to 1 year ago, SON has a worse debt to assets ratio.
2.2 Solvency
- SON has an Altman-Z score of 1.38. This is a bad value and indicates that SON is not financially healthy and even has some risk of bankruptcy.
- With a Altman-Z score value of 1.38, SON is not doing good in the industry: 77.27% of the companies in the same industry are doing better.
- SON has a debt to FCF ratio of 17.32. This is a negative value and a sign of low solvency as SON would need 17.32 years to pay back of all of its debts.
- SON has a Debt to FCF ratio of 17.32. This is comparable to the rest of the industry: SON outperforms 54.55% of its industry peers.
- A Debt/Equity ratio of 1.15 is on the high side and indicates that SON has dependencies on debt financing.
- SON has a Debt to Equity ratio (1.15) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 17.32 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.84
WACC7.56%
2.3 Liquidity
- A Current Ratio of 0.92 indicates that SON may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.92, SON is doing worse than 95.45% of the companies in the same industry.
- A Quick Ratio of 0.58 indicates that SON may have some problems paying its short term obligations.
- SON has a Quick ratio of 0.58. This is amonst the worse of the industry: SON underperforms 95.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
- SON shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.48%, which is quite good.
- Measured over the past 5 years, SON shows a small growth in Earnings Per Share. The EPS has been growing by 6.80% on average per year.
- Looking at the last year, SON shows a decrease in Revenue. The Revenue has decreased by -6.90% 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)15.48%
EPS 3Y11.27%
EPS 5Y6.8%
EPS Q2Q%28.86%
Revenue 1Y (TTM)-6.9%
Revenue growth 3Y-1.73%
Revenue growth 5Y-0.26%
Sales Q2Q%27.16%
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 10.45% yearly.
- The Revenue is expected to grow by 6.14% on average over the next years.
EPS Next Y17.04%
EPS Next 2Y11.36%
EPS Next 3Y10.68%
EPS Next 5Y10.45%
Revenue Next Year15.16%
Revenue Next 2Y6.45%
Revenue Next 3Y4.9%
Revenue Next 5Y6.14%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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
- With a Price/Earnings ratio of 8.37, the valuation of SON can be described as very reasonable.
- SON's Price/Earnings ratio is rather cheap when compared to the industry. SON is cheaper than 95.45% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. SON is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 7.83, the valuation of SON can be described as very cheap.
- Based on the Price/Forward Earnings ratio, SON is valued cheaper than 95.45% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of SON to the average of the S&P500 Index (25.83), we can say SON is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.37 | ||
| Fwd PE | 7.83 |
4.2 Price Multiples
- SON's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SON is cheaper than 68.18% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, SON is valued a bit cheaper than the industry average as 77.27% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.72 | ||
| EV/EBITDA | 8.56 |
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.
- The decent profitability rating of SON may justify a higher PE ratio.
PEG (NY)0.49
PEG (5Y)1.23
EPS Next 2Y11.36%
EPS Next 3Y10.68%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.35%, SON is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 2.38, SON pays a better dividend. On top of this SON pays more dividend than 86.36% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, SON pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
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
- 32.95% of the earnings are spent on dividend by SON. This is a low number and sustainable payout ratio.
- The dividend of SON is growing, but earnings are growing more, so the dividend growth is sustainable.
DP32.95%
EPS Next 2Y11.36%
EPS Next 3Y10.68%
SONOCO PRODUCTS CO / SON FAQ
What is the ChartMill fundamental rating of SONOCO PRODUCTS CO (SON) stock?
ChartMill assigns a fundamental rating of 5 / 10 to SON.
Can you provide the valuation status for SONOCO PRODUCTS CO?
ChartMill assigns a valuation rating of 8 / 10 to SONOCO PRODUCTS CO (SON). This can be considered as Undervalued.
Can you provide the profitability details for SONOCO PRODUCTS CO?
SONOCO PRODUCTS CO (SON) has a profitability rating of 6 / 10.
Can you provide the expected EPS growth for SON stock?
The Earnings per Share (EPS) of SONOCO PRODUCTS CO (SON) is expected to grow by 17.04% in the next year.
Is the dividend of SONOCO PRODUCTS CO sustainable?
The dividend rating of SONOCO PRODUCTS CO (SON) is 9 / 10 and the dividend payout ratio is 32.95%.