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Sonoco Products Declares Dividend of $0.37 Per Share

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Price movement

Sonoco Products (SON) has a market cap of $5.0 billion. It rose 0.06% to close at $50.60 per share on October 18, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.4%, -3.2%, and 26.7%, respectively, on the same day. SON is trading 1.9% below its 20-day moving average, 2.0% below its 50-day moving average, and 7.7% above its 200-day moving average.

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Related ETF and peers

The PowerShares S&P Mid-Cap Low Volatility Portfolio ETF (XMLV) invests 1.3% of its holdings in Sonoco. The ETF tracks a volatility-weighted index of the 80 least volatile S&P Mid-Cap 400 companies. The YTD price movement of XMLV was 13.0% on October 18.

The market caps of Sonoco Products’ competitors are as follows:

  • WestRock (WRK) — $12.1 billion
  • AptarGroup (ATR) — $4.8 billion
  • Bemis (BMS) — $4.7 billion

Sonoco Products declares dividend

Sonoco Products has declared a regular quarterly dividend of $0.37 per share on its common stock. The dividend is payable on December 9, 2016, to shareholders of record as of November 11, 2016.

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Performance in 2Q16

Sonoco Products reported 2Q16 net sales of ~$1.2 billion, a fall of 3.4% from its net sales of ~$1.3 billion in 2Q15. Sales from its Consumer Packaging, Display & Packaging, and Paper & Industrial Converted Products segments fell 3.8%, 7.6%, and 3.5%, respectively.

Sales from its Protective Solutions segment rose 2.8% between 2Q15 and 2Q16. The company’s gross profit margin rose 4.3%, and its income before interest and tax fell 7.0%. Its net income and EPS (earnings per share) fell to $56.3 million and $0.55, respectively, in 2Q16, compared with $64.4 million and $0.63, respectively, in 2Q15.

Sonoco’s cash and cash equivalents fell 41.0% and its inventories rose 3.1% between 4Q15 and 2Q16. Its current ratio rose to 1.5x and its long-term debt-to-equity ratio fell to 0.65x in 2Q16, compared with 1.4x and 0.7x, respectively, in 4Q15. It reported free cash flow of $31.9 million in 2Q16, a fall of 0.93% from 2Q15.

Projections

Sonoco Products has projected EPS of $0.65–$0.70 for 3Q16. The company made the following projections for 2016:

  • EPS of $2.68–$2.74
  • effective tax rate of 31.5%
  • free cash flow of ~$140 million, reflecting an operating cash flow of $490 million

Next, we’ll look at Brunswick (BC).

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