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%)
Overall SON gets a fundamental rating of 5 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally SON also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year SON was profitable.
- 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
- SON has a better Return On Assets (5.36%) than 77.27% of its industry peers.
- With an excellent Return On Equity value of 19.00%, SON belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
- With a Return On Invested Capital value of 6.37%, SON perfoms like the industry average, outperforming 50.00% of the companies in the same 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
- Looking at the Profit Margin, with a value of 10.26%, SON belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
- In the last couple of years the Profit Margin of SON has declined.
- SON has a Operating Margin of 10.36%. This is in the better half of the industry: SON outperforms 68.18% of its industry peers.
- SON's Operating Margin has been stable in the last couple of years.
- SON has a Gross Margin of 21.46%. This is comparable to the rest of the industry: SON outperforms 54.55% of its industry peers.
- 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SON is creating some value.
- SON has more shares outstanding than it did 1 year ago.
- 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 1.38, 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 1.38, SON is doing worse than 77.27% of the companies in the same industry.
- The Debt to FCF ratio of SON is 17.32, which is on the high side as it means it would take SON, 17.32 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 17.32, SON perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
- SON has a Debt/Equity ratio of 1.15. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.15, SON is in line with its industry, outperforming 54.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 17.32 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.84
WACC7.56%
2.3 Liquidity
- SON has a Current Ratio of 0.92. This is a bad value and indicates that SON is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.92, SON is not doing good in the industry: 95.45% of the companies in the same industry are doing better.
- A Quick Ratio of 0.58 indicates that SON may have some problems paying its short term obligations.
- The Quick ratio of SON (0.58) is worse than 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.
- The Earnings Per Share has been growing slightly by 6.80% on average over the past years.
- SON shows a decrease in Revenue. In the last year, the revenue decreased by -6.90%.
- 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.
- Based on estimates for the next years, SON will show a small growth in Revenue. The Revenue will grow by 6.14% on average per year.
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.
- 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
- With a Price/Earnings ratio of 8.37, the valuation of SON can be described as very reasonable.
- Based on the Price/Earnings ratio, SON is valued cheaper than 95.45% of the companies in the same industry.
- When comparing the Price/Earnings ratio of SON to the average of the S&P500 Index (28.60), we can say SON is valued rather cheaply.
- SON is valuated cheaply with a Price/Forward Earnings ratio of 7.83.
- Based on the Price/Forward Earnings ratio, SON is valued cheaply inside the industry as 95.45% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. SON is valued rather cheaply when compared to this.
| 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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of SON indicates a somewhat cheap valuation: SON is cheaper than 77.27% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.72 | ||
| EV/EBITDA | 8.62 |
4.3 Compensation for Growth
- The 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.
- SON's Dividend Yield is rather good when compared to the industry average which is at 2.38. SON pays more dividend than 86.36% of the companies 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 their dividend for at least 10 years, which is a reliable track record.
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.
- SON's earnings are growing more than its dividend. This makes the dividend growth 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%.