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PKG

Packaging Corporation of America NYSE:PKG Stock Report

Last Price

US$115.00

Market Cap

US$10.7b

7D

1.8%

1Y

-17.5%

Updated

03 Oct, 2022

Data

Company Financials +
PKG fundamental analysis
Snowflake Score
Valuation6/6
Future Growth0/6
Past Performance6/6
Financial Health4/6
Dividends5/6

PKG Stock Overview

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

Packaging Corporation of America Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Packaging Corporation of America
Historical stock prices
Current Share PriceUS$115.00
52 Week HighUS$168.50
52 Week LowUS$110.73
Beta0.79
1 Month Change-15.51%
3 Month Change-16.16%
1 Year Change-17.50%
3 Year Change10.89%
5 Year Change-1.47%
Change since IPO858.33%

Recent News & Updates

Sep 27

Packaging Corporation Of America Is A Long Term Buy

Summary Here at the Lab, we provide a five-year analysis versus IP and WestRock. PKG shares the same long-term thesis with a more solid balance sheet and safer shareholder remuneration. We include six quick-takeaways for a buy case. Our most devoted readers know that our internal team has a soft spot for paper companies. Within our universe coverage, we extensively follow International Paper (NYSE:IP) and WestRock (NYSE:WRK). Currently, both companies are rated as a buy. Given the recent market price performance, we would like to initiate Packaging Corporation of America (PKG). Out of the three companies, it has always been the most resilient, and also the latest stock price decline due to FedEx preliminary results and a negative note from Jefferies proved PKG's market solidity. YTD performance on IP, WestRock and PKG were -32.38%, -27.64% and -16.29% respectively (Fig. 1). Here at the Lab, we have covered the story twice already, and we suggest PKG investors to check up on our previous publications so that they are informed of the story up to now: International Paper: we double down WestRock Is A Clear Buy At This Price IP, WestRock and PKG stock prices evolution Source: Yahoo Finance (Fig. 1) Packaging Corporation of America at a Glance The company engages its activities in manufacturing and selling corrugated packaging and containerboard mainly in the US thanks to two divisions: Packaging and Paper. It was founded in 1867 and is headquartered in Illinois employing approximately 15k people. In detail, based on production capacity, Packaging Corporation of America is currently the third largest producer of corrugated packaging and containerboard in the North American area. Today, the company is in our screening based on a compelling valuation and an interesting dividend yield. So, why are we confident? First of all, PKG shared the same IP/WestRock thesis on long-term growth opportunities and ESG trends (so, no buy case recap on macro trajectories). However, today we are going to check out why PKG is a buy with some comps analysis. PKG versus IP and WestRock (5-year analysis) Starting with the top-line performance, Packaging Corporation of America scored in second place after WestRock's revenue CAGR. We already emphasized that WRK "has bought its way up through inorganic growth over the past several years", resulting in higher impairments and restructuring costs that made its P&L more volatile; Selling General & Admin Expenses. In this line, PKG was the best performer both in absolute and relative value. Number in hands, Packaging Corporation of America has the lowest SG&A expense/Gross Profit versus its closest competitors. Looking at the LTM, the ratio stands at 27.6% compared to IP and WestRock at 46.92% and 44.33% respectively; Related to point 2), the company has the best profitability in terms of EBITDA. This is due to multiple reasons: 1) PKG industrial facilities are located in end-client proximity to minimize logistics costs, 2) centralized procurement, 3) energy requirements are almost self-generated (Fig 1), 4) direct sale representatives 5) higher hourly employees with respect to the total workforce compared to IP and WestRock (Fig 2); Going down to the P&L, interest expenses are much lower for PKG. This is due to a lower total debt compared to its peers and higher duration. With PKG's latest presentation, we clearly see that interest rates were lowered to 3.5% and duration increased by almost eight years (Fig 3). WestRock just recently announced a new acquisition in Mexico and given the current macro scenario, we believe that IP and WestRock will refinance at higher rates; Going to the remuneration, PKG has a lower payout ratio and increased its DPS year-on-year (even during the COVID-19 pandemic outbreak). Well, there is no need to explain that WestRock suspended the dividend payment while IP has maintained it, lowering later on after the Sylvamo spin-off; International Paper has a JV in Russia. That is not the case for WestRock and PKG. PKG energy Source: PKG annual report (Fig 1) PKG employees Source: PKG annual report (Fig 2) PKG debt ref. and duration Source: PKG Investor Presentation (Fig 3) Conclusion and Valuation Going to the valuation, here at the Lab, we used to value paper mills by combining and averaging two metrics: An 8.0x multiple on EV/EBITDA on our 12-month forward estimates, A DCF analysis in which our team assumes a 10% cost of equity and a perpetual growth rate of 2%.

Sep 21

Packaging declares $1.25 dividend

Packaging (NYSE:PKG) declares $1.25/share quarterly dividend, in line with previous. Forward yield 4.19% Payable Oct. 17; for shareholders of record Oct. 3; ex-div Sept. 30. See PKG Dividend Scorecard, Yield Chart, & Dividend Growth.

Sep 07
Does Packaging Corporation of America (NYSE:PKG) Deserve A Spot On Your Watchlist?

Does Packaging Corporation of America (NYSE:PKG) Deserve A Spot On Your Watchlist?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

PKGUS PackagingUS Market
7D1.8%2.0%1.0%
1Y-17.5%-25.5%-20.0%

Return vs Industry: PKG exceeded the US Packaging industry which returned -27.2% over the past year.

Return vs Market: PKG exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is PKG's price volatile compared to industry and market?
PKG volatility
PKG Average Weekly Movement5.1%
Packaging Industry Average Movement5.1%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: PKG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: PKG's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
186715,200Mark Kowlzanhttps://www.packagingcorp.com

Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products in the United States. The company operates through Packaging and Paper segments. The Packaging segment offers various containerboard and 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, as well as packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.

Packaging Corporation of America Fundamentals Summary

How do Packaging Corporation of America's earnings and revenue compare to its market cap?
PKG fundamental statistics
Market CapUS$10.70b
Earnings (TTM)US$1.02b
Revenue (TTM)US$8.42b

10.5x

P/E Ratio

1.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PKG income statement (TTM)
RevenueUS$8.42b
Cost of RevenueUS$6.27b
Gross ProfitUS$2.15b
Other ExpensesUS$1.13b
EarningsUS$1.02b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 24, 2022

Earnings per share (EPS)10.91
Gross Margin25.54%
Net Profit Margin12.06%
Debt/Equity Ratio62.4%

How did PKG perform over the long term?

See historical performance and comparison

Dividends

4.3%

Current Dividend Yield

39%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is PKG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PKG?

Other financial metrics that can be useful for relative valuation.

PKG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.5x
Enterprise Value/EBITDA6.4x
PEG Ratio10.8x

Price to Earnings Ratio vs Peers

How does PKG's PE Ratio compare to its peers?

PKG PE Ratio vs Peers
The above table shows the PE ratio for PKG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average11.8x
AVY Avery Dennison
18x8.2%US$13.7b
WRK WestRock
8.8x20.2%US$8.1b
IP International Paper
8.3x-0.08%US$11.8b
SEE Sealed Air
12.1x9.2%US$6.6b
PKG Packaging Corporation of America
10.5x1.0%US$10.7b

Price-To-Earnings vs Peers: PKG is good value based on its Price-To-Earnings Ratio (10.5x) compared to the peer average (11.8x).


Price to Earnings Ratio vs Industry

How does PKG's PE Ratio compare vs other companies in the North American Packaging Industry?

Price-To-Earnings vs Industry: PKG is good value based on its Price-To-Earnings Ratio (10.5x) compared to the North American Packaging industry average (12.6x)


Price to Earnings Ratio vs Fair Ratio

What is PKG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PKG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio10.5x
Fair PE Ratio15.3x

Price-To-Earnings vs Fair Ratio: PKG is good value based on its Price-To-Earnings Ratio (10.5x) compared to the estimated Fair Price-To-Earnings Ratio (15.3x).


Share Price vs Fair Value

What is the Fair Price of PKG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PKG ($115) is trading below our estimate of fair value ($316.41)

Significantly Below Fair Value: PKG is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Packaging Corporation of America forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


1.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PKG's forecast earnings growth (1% per year) is below the savings rate (1.9%).

Earnings vs Market: PKG's earnings (1% per year) are forecast to grow slower than the US market (14.8% per year).

High Growth Earnings: PKG's earnings are forecast to grow, but not significantly.

Revenue vs Market: PKG's revenue (1.8% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: PKG's revenue (1.8% per year) is forecast to grow slower than 20% 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 (20%).


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Past Performance

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

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


4.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PKG has high quality earnings.

Growing Profit Margin: PKG's current net profit margins (12.1%) are higher than last year (8.9%).


Past Earnings Growth Analysis

Earnings Trend: PKG's earnings have grown by 4.5% per year over the past 5 years.

Accelerating Growth: PKG's earnings growth over the past year (60.7%) exceeds its 5-year average (4.5% per year).

Earnings vs Industry: PKG earnings growth over the past year (60.7%) exceeded the Packaging industry 12.1%.


Return on Equity

High ROE: PKG's Return on Equity (25.8%) is considered high.


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Financial Health

How is Packaging Corporation of America's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: PKG's short term assets ($3.0B) exceed its short term liabilities ($972.9M).

Long Term Liabilities: PKG's short term assets ($3.0B) do not cover its long term liabilities ($3.4B).


Debt to Equity History and Analysis

Debt Level: PKG's net debt to equity ratio (43.5%) is considered high.

Reducing Debt: PKG's debt to equity ratio has reduced from 137% to 62.4% over the past 5 years.

Debt Coverage: PKG's debt is well covered by operating cash flow (53.3%).

Interest Coverage: PKG's interest payments on its debt are well covered by EBIT (18.6x coverage).


Balance Sheet


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Dividend

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

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.35%

Current Dividend Yield

Dividend Yield vs Market

Packaging Corporation of America Dividend Yield vs Market
How does Packaging Corporation of America dividend yield compare to the market?
SegmentDividend Yield
Company (Packaging Corporation of America)4.3%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.6%
Industry Average (Packaging)3.1%
Analyst forecast in 3 Years (Packaging Corporation of America)3.9%

Notable Dividend: PKG's dividend (4.35%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: PKG's dividend (4.35%) is low compared to the top 25% of dividend payers in the US market (4.75%).


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.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.1%), PKG's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (87.4%), PKG's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

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

3.4yrs

Average management tenure


CEO

Mark Kowlzan (66 yo)

12.25yrs

Tenure

US$12,157,313

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

Mark Kowlzan's Compensation vs Packaging Corporation of America Earnings
How has Mark Kowlzan's remuneration changed compared to Packaging Corporation of America's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$1b

Mar 31 2022n/an/a

US$922m

Dec 31 2021US$12mUS$1m

US$835m

Sep 30 2021n/an/a

US$742m

Jun 30 2021n/an/a

US$632m

Mar 31 2021n/an/a

US$482m

Dec 31 2020US$10mUS$1m

US$457m

Sep 30 2020n/an/a

US$470m

Jun 30 2020n/an/a

US$510m

Mar 31 2020n/an/a

US$646m

Dec 31 2019US$10mUS$1m

US$691m

Sep 30 2019n/an/a

US$759m

Jun 30 2019n/an/a

US$786m

Mar 31 2019n/an/a

US$779m

Dec 31 2018US$10mUS$1m

US$732m

Sep 30 2018n/an/a

US$796m

Jun 30 2018n/an/a

US$729m

Mar 31 2018n/an/a

US$686m

Dec 31 2017US$11mUS$1m

US$663m

Sep 30 2017n/an/a

US$506m

Jun 30 2017n/an/a

US$486m

Mar 31 2017n/an/a

US$459m

Dec 31 2016US$9mUS$1m

US$445m

Sep 30 2016n/an/a

US$439m

Jun 30 2016n/an/a

US$447m

Mar 31 2016n/an/a

US$445m

Dec 31 2015US$7mUS$1m

US$432m

Compensation vs Market: Mark's total compensation ($USD12.16M) is about average for companies of similar size in the US market ($USD13.04M).

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


Leadership Team

Experienced Management: PKG's management team is considered experienced (3.4 years average tenure).


Board Members

Experienced Board: PKG's board of directors are seasoned and experienced ( 12.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NYSE:PKG Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
06 Jun 22SellUS$2,212,107Robert MundyIndividual13,800US$160.30
25 May 22BuyUS$76,604Donna HarmanIndividual500US$153.21
27 Apr 22SellUS$1,213,861Charles CarterIndividual7,447US$163.00
11 Feb 22SellUS$517,273Bruce RidleyIndividual3,481US$148.74

Ownership Breakdown

What is the ownership structure of PKG?
Owner TypeNumber of SharesOwnership Percentage
State or Government47,3630.05%
Individual Insiders1,523,8461.6%
General Public5,530,3455.9%
Institutions85,964,62492.4%

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


Top Shareholders

Top 25 shareholders own 64.55% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
12.85%
The Vanguard Group, Inc.
11,955,919$1.4b-0.76%0.03%
9.23%
BlackRock, Inc.
8,588,152$987.6m5.14%0.02%
4.49%
State Street Global Advisors, Inc.
4,180,715$480.8m-2.32%0.03%
3.99%
T. Rowe Price Group, Inc.
3,713,547$427.1m13.8%0.05%
3.43%
J.P. Morgan Asset Management, Inc.
3,192,775$367.2m-10.04%0.07%
3.29%
Victory Capital Management Inc.
3,064,817$352.5m-12.98%0.39%
2.35%
Fondsmaeglerselskabet Maj Invest A/S
2,186,096$251.4m-0.96%4.66%
2.17%
American Century Investment Management Inc
2,020,171$232.3m-1.78%0.17%
2.12%
Managed Account Advisors LLC
1,973,165$226.9m-27.5%0.06%
2.08%
Geode Capital Management, LLC
1,933,318$222.3m2.03%0.03%
2.03%
Nordea Investment Management AB
1,892,836$217.7m-6.51%0.19%
1.9%
Fidelity International Ltd
1,769,103$203.4m-8.18%0.11%
1.62%
Capital Research and Management Company
1,506,630$173.3m-18.02%0.01%
1.45%
Eaton Vance Management
1,352,713$155.6m-9.7%0.06%
1.42%
Columbia Management Investment Advisers, LLC
1,320,052$151.8m-1.35%0.05%
1.3%
Merrill Lynch & Co. Inc., Banking Investments
1,213,708$139.6m2.93%0.07%
1.22%
Invesco Capital Management LLC
1,132,637$130.3m11.08%0.1%
1.18%
Northern Trust Global Investments
1,098,742$126.4m-1.04%0.03%
1.08%
Dimensional Fund Advisors LP
1,005,318$115.6m-2.43%0.03%
1.01%
Norges Bank Investment Management
944,125$108.6m0%0.01%
0.96%
BNY Mellon Asset Management
894,388$102.9m4.77%0.02%
0.93%
UBS Asset Management
865,942$99.6m-1.84%0.02%
0.85%
Acadian Asset Management LLC
793,626$91.3m76.97%0.36%
0.8%
Legal & General Investment Management Limited
745,025$85.7m5.1%0.03%
0.79%
Charles Schwab Investment Management, Inc.
734,125$84.4m0.15%0.02%

Company Information

Packaging Corporation of America's 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
  • Implied Market Cap: US$10.703b
  • Shares outstanding: 93.07m
  • 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

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/03 00:00
End of Day Share Price2022/10/03 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.