Head to Head Analysis: Sonoco Products (SON) and Its Rivals

Sonoco Products (NYSE: SON) is one of 15 publicly-traded companies in the “Non-Paper Containers & Packaging” industry, but how does it contrast to its peers? We will compare Sonoco Products to related companies based on the strength of its institutional ownership, analyst recommendations, earnings, dividends, profitability, risk and valuation.

Dividends

Sonoco Products pays an annual dividend of $1.56 per share and has a dividend yield of 2.9%. Sonoco Products pays out 57.4% of its earnings in the form of a dividend. As a group, “Non-Paper Containers & Packaging” companies pay a dividend yield of 2.2% and pay out 62.8% of their earnings in the form of a dividend. Sonoco Products has raised its dividend for 36 consecutive years. Sonoco Products is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

This table compares Sonoco Products and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sonoco Products 5.63% 16.40% 6.38%
Sonoco Products Competitors 2.82% 22.99% 4.08%

Analyst Recommendations

This is a breakdown of current ratings for Sonoco Products and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sonoco Products 0 5 2 0 2.29
Sonoco Products Competitors 83 598 404 6 2.31

Sonoco Products currently has a consensus target price of $53.00, suggesting a potential downside of 0.60%. As a group, “Non-Paper Containers & Packaging” companies have a potential upside of 3.17%. Given Sonoco Products’ peers stronger consensus rating and higher possible upside, analysts plainly believe Sonoco Products has less favorable growth aspects than its peers.

Institutional and Insider Ownership

72.0% of Sonoco Products shares are held by institutional investors. Comparatively, 75.3% of shares of all “Non-Paper Containers & Packaging” companies are held by institutional investors. 1.9% of Sonoco Products shares are held by company insiders. Comparatively, 7.1% of shares of all “Non-Paper Containers & Packaging” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sonoco Products and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Sonoco Products $4.78 billion $286.43 million 19.60
Sonoco Products Competitors $4.42 billion $182.22 million 136.87

Sonoco Products has higher revenue and earnings than its peers. Sonoco Products is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Sonoco Products has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Sonoco Products’ peers have a beta of 1.20, meaning that their average stock price is 20% more volatile than the S&P 500.

Summary

Sonoco Products peers beat Sonoco Products on 9 of the 15 factors compared.

Sonoco Products Company Profile

Sonoco Products Company is engaged in manufacturing of industrial and consumer packaging products, and providing packaging services. The Company operates in four segments: Consumer Packaging, Paper and Industrial Converted Products, Display and Packaging, and Protective Solutions. Its Consumer Packaging segment’s products and services include round composite cans, aluminum, steel and peelable membrane easy-open closures for composite and metal cans; plastic bottles, cups and trays, and printed flexible packaging and global brand management. The Display and Packaging segment’s products and services include point-of-purchase displays; fulfilment; supply chain management, and paperboard specialties. Its Paper and Industrial Converted Products segment provides the raw material for its fiber-based packaging. The Protective Solutions segment’s products and services include custom-engineered and expanded foam protective packaging and components, and temperature-assured packaging.

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