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Here's Why You Should Add Sonoco (SON) to Your Portfolio Now
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With the latest tax reform and consistent focus on the Grow and Optimize strategy, Sonoco Products Company (SON - Free Report) is a solid bet now. Further, synergies from the Highland Packaging acquisition are anticipated to drive results.
Let’s delve deeper into the factors that make this manufacturer of consumer and industrial packaging products an attractive investment option.
The company also has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Crosses Industry Mark: Sonoco’s shares have outperformed the industry with respect to price over the past three months. The company’s shares have gained around 6%, while the industry has lost 0.5%.
Upward Estimate Revision: The Zacks Consensus Estimate for 2018 earnings has moved up 2.8% to $3.29 in the last 30 days. The same for 2019 has gone up 1.8% to $3.48.
Superior Return on Assets (ROA): Sonoco’s ROA of 6.6% is higher than the industry’s 5.6%, highlighting the company’s efficiency in generating earnings through effective management of assets.
Upbeat Guidance: For 2018, Sonoco raised its adjusted earnings per share guidance to $3.22-$3.32, depicting 17% year-over-year growth at the mid-point. The outlook reflects a downward revision in the effective tax rate to approximately 26% and projected earnings accretion from the Highland Packaging acquisition. For second-quarter 2018, the company projects adjusted earnings per share of 83-89 cents, reflecting 100% year-over-year growth at the mid-point.
Growth Drivers in Place: Sonoco is focused on implementing its Grow and Optimize strategy. Under it, the company targets acquisitions, development of new products and prospects in the United States. It will continue to focus on optimizing businesses through process improvement, standardization, cost control and commercial excellence. Its focus on thermoformed plastics, flexible packaging and consolidating industrial opportunities, particularly in emerging markets, is also expected to stoke growth.
Sonoco’s recent buyout of Highland Packaging Solutions — a leading manufacturer of thermoformed packaging for fresh fruits, vegetables and eggs — will strengthen its thermoforming business and expand presence in the fast-growing fresh perimeter of grocery stores. Sonoco is expected to rake in approximately $300 million in annual sales of thermoformed packaging, serving the fresh produce and dairy markets.
Notably, Sonoco is in the process of rightsizing its plants and other businesses to drive volumes. Thus, its paper-based consumer protective business continues to perform well.
Sonoco has a long-term earnings growth rate of 4.7%.
Other Stocks to Consider
A few other equally-ranked stocks in the same sector are A. O. Smith Corporation (AOS - Free Report) , Codexis, Inc. (CDXS - Free Report) and IDEX Corporation (IEX - Free Report) .
A. O. Smith has a long-term earnings growth rate of 12.2%. Its shares have been up 18.5% over the past year.
Codexis has a long-term earnings growth rate of 15%. The company’s shares have appreciated 178% over a year.
IDEX has a long-term earnings growth rate of 11%. The stock has gained 33% in a year’s time.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Here's Why You Should Add Sonoco (SON) to Your Portfolio Now
With the latest tax reform and consistent focus on the Grow and Optimize strategy, Sonoco Products Company (SON - Free Report) is a solid bet now. Further, synergies from the Highland Packaging acquisition are anticipated to drive results.
Let’s delve deeper into the factors that make this manufacturer of consumer and industrial packaging products an attractive investment option.
What’s Working in Favor of Sonoco?
Solid Rank & VGM Score: Sonoco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company also has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Crosses Industry Mark: Sonoco’s shares have outperformed the industry with respect to price over the past three months. The company’s shares have gained around 6%, while the industry has lost 0.5%.
Upward Estimate Revision: The Zacks Consensus Estimate for 2018 earnings has moved up 2.8% to $3.29 in the last 30 days. The same for 2019 has gone up 1.8% to $3.48.
Superior Return on Assets (ROA): Sonoco’s ROA of 6.6% is higher than the industry’s 5.6%, highlighting the company’s efficiency in generating earnings through effective management of assets.
Upbeat Guidance: For 2018, Sonoco raised its adjusted earnings per share guidance to $3.22-$3.32, depicting 17% year-over-year growth at the mid-point. The outlook reflects a downward revision in the effective tax rate to approximately 26% and projected earnings accretion from the Highland Packaging acquisition. For second-quarter 2018, the company projects adjusted earnings per share of 83-89 cents, reflecting 100% year-over-year growth at the mid-point.
Growth Drivers in Place: Sonoco is focused on implementing its Grow and Optimize strategy. Under it, the company targets acquisitions, development of new products and prospects in the United States. It will continue to focus on optimizing businesses through process improvement, standardization, cost control and commercial excellence. Its focus on thermoformed plastics, flexible packaging and consolidating industrial opportunities, particularly in emerging markets, is also expected to stoke growth.
Sonoco’s recent buyout of Highland Packaging Solutions — a leading manufacturer of thermoformed packaging for fresh fruits, vegetables and eggs — will strengthen its thermoforming business and expand presence in the fast-growing fresh perimeter of grocery stores. Sonoco is expected to rake in approximately $300 million in annual sales of thermoformed packaging, serving the fresh produce and dairy markets.
Notably, Sonoco is in the process of rightsizing its plants and other businesses to drive volumes. Thus, its paper-based consumer protective business continues to perform well.
Sonoco has a long-term earnings growth rate of 4.7%.
Other Stocks to Consider
A few other equally-ranked stocks in the same sector are A. O. Smith Corporation (AOS - Free Report) , Codexis, Inc. (CDXS - Free Report) and IDEX Corporation (IEX - Free Report) .
A. O. Smith has a long-term earnings growth rate of 12.2%. Its shares have been up 18.5% over the past year.
Codexis has a long-term earnings growth rate of 15%. The company’s shares have appreciated 178% over a year.
IDEX has a long-term earnings growth rate of 11%. The stock has gained 33% in a year’s time.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>