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Packaging Corp of America PKG

Morningstar Rating
$180.98 −1.93 (1.06%)
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Company Report

Packaging Corp Navigates a Challenging Operating Environment, but Higher Prices Should Offer Relief

Packaging Corp of America manufactures packaging products and uncoated freesheet, or UFS, paper. It accounts for roughly 10% of the North American containerboard market and is the third-largest producer. The majority of the company's containerboard is used internally to produce corrugated packaging, with the remainder sold to external customers. A decade of consolidation in the corrugated packaging industry allowed Packaging Corp to raise prices aggressively, but increased competitive intensity from legacy paper producers has limited pricing power in recent years.

Price vs Fair Value

PKG is trading at a 50% premium.
Price
$180.98
Fair Value
$995.00
Uncertainty
Medium
1-Star Price
$592.27
5-Star Price
$79.90
Economic Moat
Gyzs
Capital Allocation
Brwxycfnt

Bulls Say, Bears Say

Bulls

Packaging Corp’s focus on specialized products and regional customers will enable the firm to continue earning stronger returns than its competitors.

Bears

Despite a period of attractive margin expansion in containerboard production, the best days are behind Packaging Corp as new capacity weighs on linerboard prices.

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News

Trading Information

Previous Close Price
$182.91
Day Range
$180.54182.94
52-Week Range
$122.20188.61
Bid/Ask
$178.77 / $187.30
Market Cap
$16.22 Bil
Volume/Avg
526,319 / 635,684

Key Statistics

Price/Earnings (Normalized)
20.83
Price/Sales
2.08
Dividend Yield (Trailing)
2.76%
Dividend Yield (Forward)
2.76%
Total Yield
3.12%

Company Profile

Packaging Corp of America is the third-largest containerboard and corrugated packaging manufacturer in the United States. It produces over 4 million tons of containerboard annually. The company's share of the domestic containerboard market is roughly 10%. The firm differentiates itself from larger competitors by focusing on smaller customers and operating with a high degree of flexibility.
Sector
Consumer Cyclical
Industry
Packaging & Containers
Stock Style Box
Mid Core
Total Number of Employees
14,900

Competitors

Valuation

Metric
PKG
IP
WRK
Price/Earnings (Normalized)
20.8316.1018.12
Price/Book Value
4.061.451.22
Price/Sales
2.080.640.62
Price/Cash Flow
12.266.657.82
Price/Earnings
PKG
IP
WRK

Financial Strength

Metric
PKG
IP
WRK
Quick Ratio
1.721.160.74
Current Ratio
2.571.671.55
Interest Coverage
20.031.46−2.44
Quick Ratio
PKG
IP
WRK

Profitability

Metric
PKG
IP
WRK
Return on Assets (Normalized)
9.56%3.18%2.44%
Return on Equity (Normalized)
20.47%8.88%6.68%
Return on Invested Capital (Normalized)
12.32%6.56%5.65%
Return on Assets
PKG
IP
WRK
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Packaging & Containers Industry Comparables

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Economic Moat
Market Cap
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AVY
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AMCR
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WRK
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IP
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CCK
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SON
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SEE
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SLGN
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