Packaging Corporation of America Acquires Columbus Container

Packaging Corporation of America (PKG) has a market cap of $8.0 billion. It fell 1.0% to close at $84.76 per share on November 30, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.11%, 2.7%, and 38.0%, respectively, on the same day.

PKG is trading 1.6% above its 20-day moving average, 3.0% above its 50-day moving average, and 21.2% above its 200-day moving average.

The iShares Global Timber & Forestry ETF (WOOD) invests 4.9% of its holdings in Packaging Corporation of America (PKG). The YTD price movement of WOOD was 9.4% on November 30.

The market caps of PKG’s competitors are as follows:

• International Paper (IP) — $20.0 billion
• WestRock Company (WRK) — $12.9 billion
• Domtar Corporation (UFS) — $2.5 billion

In a press release on November 30, 2016, Packaging Corporation of America noted, “Packaging Corporation of America (PKG) today announced that it has completed its acquisition of Columbus Container, Inc., an independent corrugated products producer in a cash-free, debt-free transaction. Funding for the $100 million acquisition came from available cash on hand.”

Packaging Corporation of America reported 3Q16 net sales of $1.48 billion, a rise of 0.90% over its net sales of $1.47 billion in 3Q15. Sales of the Packaging and Paper segments rose 2.0% and 0.31%, respectively, between 3Q15 and 3Q16. The company’s gross profit margin and operating margin fell 10 basis points and 100 basis points, respectively.

Its net income and EPS (earnings per share) fell to $118.2 million and $1.26, respectively, in 3Q16, compared with $126.3 million and $1.31 in 3Q15. It reported EBITDA[1. earnings before interest, tax, depreciation, and amortization] excluding special items of $298.9 million in 3Q16, a fall of 0.03% from 3Q15.

Packaging Corporation of America’s (PKG) capital spending fell 12.8%, and its cash balance rose 49.7% between 3Q15 and 3Q16.

Next, we’ll look at Coca-Cola Company (KO).