NYSE:PKG

Stock Analysis Report

Packaging Corporation of America

Executive Summary

Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products primarily in the United States.


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Packaging Corporation of America's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PKG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.6%

PKG

-0.3%

US Packaging

0.9%

US Market


1 Year Return

0.5%

PKG

12.0%

US Packaging

20.0%

US Market

Return vs Industry: PKG underperformed the US Packaging industry which returned 12.1% over the past year.

Return vs Market: PKG underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

PKGIndustryMarket
7 Day-1.6%-0.3%0.9%
30 Day-9.3%-0.4%1.4%
90 Day-13.0%3.4%8.8%
1 Year3.6%0.5%14.7%12.0%22.5%20.0%
3 Year12.7%3.9%24.3%16.4%49.9%40.3%
5 Year36.1%17.5%31.9%15.6%73.2%54.1%

Price Volatility Vs. Market

How volatile is Packaging Corporation of America's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Packaging Corporation of America undervalued compared to its fair value and its price relative to the market?

10.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PKG ($98.94) is trading below our estimate of fair value ($110.54)

Significantly Below Fair Value: PKG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PKG is good value based on its PE Ratio (13.4x) compared to the Packaging industry average (19.9x).

PE vs Market: PKG is good value based on its PE Ratio (13.4x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: PKG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: PKG is good value based on its PB Ratio (3.1x) compared to the US Packaging industry average (3.2x).


Next Steps

Future Growth

How is Packaging Corporation of America forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

-6.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PKG's earnings are forecast to decline over the next 3 years (-6.8% per year).

Earnings vs Market: PKG's earnings are forecast to decline over the next 3 years (-6.8% per year).

High Growth Earnings: PKG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PKG's revenue is expected to decline over the next 3 years (-1% per year).

High Growth Revenue: PKG's revenue is forecast to decline over the next 3 years (-1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PKG's Return on Equity is forecast to be low in 3 years time (17.7%).


Next Steps

Past Performance

How has Packaging Corporation of America performed over the past 5 years?

16.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PKG has high quality earnings.

Growing Profit Margin: PKG's current net profit margins (9.9%) are lower than last year (10.4%).


Past Earnings Growth Analysis

Earnings Trend: PKG's earnings have grown by 16.4% per year over the past 5 years.

Accelerating Growth: PKG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PKG had negative earnings growth (-5.6%) over the past year, making it difficult to compare to the Packaging industry average (-6.5%).


Return on Equity

High ROE: PKG's Return on Equity (22.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Packaging Corporation of America's financial position?


Financial Position Analysis

Short Term Liabilities: PKG's short term assets ($2.5B) exceed its short term liabilities ($770.7M).

Long Term Liabilities: PKG's short term assets ($2.5B) do not cover its long term liabilities ($3.4B).


Debt to Equity History and Analysis

Debt Level: PKG's debt to equity ratio (81.9%) is considered high.

Reducing Debt: PKG's debt to equity ratio has reduced from 154.8% to 81.9% over the past 5 years.

Debt Coverage: PKG's debt is well covered by operating cash flow (49.2%).

Interest Coverage: PKG's interest payments on its debt are well covered by EBIT (11.6x coverage).


Balance Sheet

Inventory Level: PKG has a high level of physical assets or inventory.

Debt Coverage by Assets: PKG's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is Packaging Corporation of America's current dividend yield, its reliability and sustainability?

3.19%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%1.4%markettop25%3.7%industryaverage2.5%forecastin3Years3.3%

Current dividend yield vs market & industry

Notable Dividend: PKG's dividend (3.19%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: PKG's dividend (3.19%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: PKG's dividends per share have been stable in the past 10 years.

Growing Dividend: PKG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.9%), PKG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PKG's dividends in 3 years are forecast to be covered by earnings (67.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.5yrs

Average management tenure


CEO

Mark Kowlzan (63yo)

9.6yrs

Tenure

US$10,265,569

Compensation

Mr. Mark W. Kowlzan has been the Chief Executive Officer of Packaging Corporation of America since July 2010. Mr. Kowlzan served as Senior Vice President of Containerboard at Packaging Corporation of Ameri ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD10.27M) is above average for companies of similar size in the US market ($USD6.26M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mark Kowlzan
Chairman of the Board & CEO9.6yrsUS$10.27m0.41% $38.4m
Robert Mundy
Executive VP & CFO4.4yrsUS$3.25m0.033% $3.1m
Charles Carter
Senior Vice President of Containerboard Mill Operations6.6yrsUS$2.59m0.041% $3.8m
Bruce Ridley
Senior Vice President of Environmental Health0.7yrsno data0.019% $1.8m
Pamela Barnes
Senior VP of Finance0.8yrsno data0.045% $4.2m
Robert Schneider
Senior VP & Chief Information Officer0.7yrsno data0.051% $4.8m
Kent Pflederer
Senior VP12.7yrsUS$1.85m0.051% $4.7m
Thomas Hassfurther
Executive Vice President of Corrugated Products10.4yrsUS$8.13m0.27% $25.0m
Thomas W. Walton
Senior Vice President of Sales & Marketing - Corrugated Products10.3yrsUS$1.63m0.040% $3.7m
Donald Shirley
Senior Vice President of Corporate Engineering & Process Technology0.7yrsno data0.019% $1.8m

5.5yrs

Average Tenure

59yo

Average Age

Experienced Management: PKG's management team is seasoned and experienced (5.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mark Kowlzan
Chairman of the Board & CEO9.6yrsUS$10.27m0.41% $38.4m
Samuel Mencoff
Lead Director0yrsUS$245.05k0.34% $31.7m
Paul Stecko
Director20.9yrsUS$246.59k0.041% $3.8m
Thomas Souleles
Independent Director9.4yrsUS$230.05k0.011% $989.8k
Cheryl Beebe
Independent Director11.8yrsUS$245.05k0.013% $1.2m
Roger Porter
Independent Director14.8yrsUS$245.05k0.020% $1.8m
Robert Lyons
Independent Director8.5yrsUS$230.05k0.0098% $907.1k
Hasan Jameel
Independent Director11.8yrsUS$230.05k0.0099% $923.8k
James Woodrum
Independent Director10.8yrsUS$245.05k0.012% $1.1m
Thomas Maurer
Independent Director5.8yrsUS$230.05k0.0061% $564.1k

10.8yrs

Average Tenure

63yo

Average Age

Experienced Board: PKG's board of directors are seasoned and experienced ( 10.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PKG insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Packaging Corporation of America's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Packaging Corporation of America
  • Ticker: PKG
  • Exchange: NYSE
  • Founded: 1867
  • Industry: Paper Packaging
  • Sector: Materials
  • Market Cap: US$9.294b
  • Shares outstanding: 93.93m
  • Website: https://www.packagingcorp.com

Number of Employees


Location

  • Packaging Corporation of America
  • 1 North Field Court
  • Lake Forest
  • Illinois
  • 60045
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PKGNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 2000
PKADB (Deutsche Boerse AG)YesCommon StockDEEURJan 2000
0KEZLSE (London Stock Exchange)YesCommon StockGBUSDJan 2000
P1KG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products primarily in the United States. The company’s Packaging segment offers various corrugated packaging products, such as conventional shipping containers used to protect and transport manufactured goods; multi-color boxes and displays that help to merchandise the packaged product in retail locations; and honeycomb protective packaging products. It also produces packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. This segment sells its corrugated products through a direct sales and marketing organization, independent brokers, and distribution partners. Its Paper segment manufactures and sells white papers comprising commodity and specialty papers with various features, such as colors, coatings, high brightness, and recycled content. The white papers also consist of communication papers, including cut-size office papers, and printing and converting papers. This segment sells white papers through the company’s own sales personnel. Packaging Corporation of America was founded in 1867 and is headquartered in Lake Forest, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 23:45
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.