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
|Historical stock prices|
|Current Share Price||US$115.00|
|52 Week High||US$168.50|
|52 Week Low||US$110.73|
|1 Month Change||-15.51%|
|3 Month Change||-16.16%|
|1 Year Change||-17.50%|
|3 Year Change||10.89%|
|5 Year Change||-1.47%|
|Change since IPO||858.33%|
Recent News & Updates
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%.
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.
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...
|PKG||US Packaging||US Market|
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.
|PKG Average Weekly Movement||5.1%|
|Packaging Industry Average Movement||5.1%|
|Market Average Movement||6.8%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
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
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
|PKG fundamental statistics|
Is PKG overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|PKG income statement (TTM)|
|Cost of Revenue||US$6.27b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 24, 2022
|Earnings per share (EPS)||10.91|
|Net Profit Margin||12.06%|
How did PKG perform over the long term?See historical performance and comparison
4.3%Current Dividend Yield
Is PKG undervalued compared to its fair value, analyst forecasts and its price relative to the market?
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
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.
|What is PKG's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does PKG's PE Ratio compare to its peers?
|PKG PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
AVY Avery Dennison
IP International Paper
SEE Sealed Air
PKG Packaging Corporation of America
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.
|Current PE Ratio||10.5x|
|Fair PE Ratio||15.3x|
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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How is Packaging Corporation of America forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score0/6
Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
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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How has Packaging Corporation of America performed over the past 5 years?
Past Performance Score6/6
Past Performance Score 6/6
Growing Profit Margin
Earnings vs Industry
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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How is Packaging Corporation of America's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
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).
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What is Packaging Corporation of America current dividend yield, its reliability and sustainability?
Dividend Score 5/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Packaging Corporation of America Dividend Yield vs Market|
|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.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mark Kowlzan (66 yo)
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|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$12m||US$1m|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$10m||US$1m|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$10m||US$1m|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$10m||US$1m|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$11m||US$1m|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$9m||US$1m|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$7m||US$1m|
Compensation vs Market: Mark's total compensation ($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.
Experienced Management: PKG's management team is considered experienced (3.4 years average tenure).
Experienced Board: PKG's board of directors are seasoned and experienced ( 12.3 years average tenure).
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
|06 Jun 22||SellUS$2,212,107||Robert Mundy||Individual||13,800||US$160.30|
|25 May 22||BuyUS$76,604||Donna Harman||Individual||500||US$153.21|
|27 Apr 22||SellUS$1,213,861||Charles Carter||Individual||7,447||US$163.00|
|11 Feb 22||SellUS$517,273||Bruce Ridley||Individual||3,481||US$148.74|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||47,363||0.05%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Packaging Corporation of America's employee growth, exchange listings and data sources
- 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
- Packaging Corporation of America
- 1 North Field Court
- Lake Forest
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|PKG||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Jan 2000|
|PKA||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jan 2000|
|0KEZ||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Jan 2000|
|P1KG34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 2 REPR 1 COM||BR||BRL||Jan 2020|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/03 00:00|
|End of Day Share Price||2022/10/03 00:00|
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.