On Apr 17, 2014, we issued an updated research report on
Bemis Company, Inc.
). This manufacturer and seller of packaging products and
pressure sensitive materials is expected to benefit from
acquisitions as well as strong orders and backlog.
The company broadened its presence in the Asia-Pacific with the
purchase of Foshan New Changsheng in Jul 2013. In addition, Bemis
recorded strong orders and backlog across all geographies. Going
forward, it is optimistic that product launches will drive
In Feb 2014, Bemis' board of directors approved the 31st
consecutive annual increase in quarterly cash dividend to 27
cents per share, which marked a 4% rise. In addition, the company
repurchased $2 million shares during 2013.
Bemis expects cash flow from operating activities to exceed
$500 million in 2014. The company's capital investment strategy
will support its dividend payouts and help to fund strategic
acquisitions and share repurchases during the year.
Bemis announced the shutdown of one of its Pressure Sensitive
Materials manufacturing facilities in Stow, OH in Mar 2014. This
will improve the company's competitiveness and aid the long-term
growth of its Pressure Sensitive Materials business. In April
2014, Bemis divested its Paper Packaging Division. The sale will
enable the company to focus on strategic opportunities in
high-barrier flexible packaging, medical and pharmaceutical
packaging markets in developing economies.
Bemis reported adjusted earnings of 54 cents per share for the
fourth quarter and a record $2.28 per share for full-year 2013,
in line with management's guidance range. For the first quarter
of 2014, management expects adjusted earnings per share in the
band of 55-60 cents. For full-year 2014, earnings per share are
projected to range between $2.40 and $2.55, which represents a
year-over-year increase of 5%-12% from the previous year.
On the flip side, Bemis remains cautious about the weaker
Brazilian currency. Additionally, increased costs related to
mechanical and electrical issues that were faced during the
transition of production equipment from plants closed as part of
the facility consolidation remains a concern. Furthermore, Bemis'
revenues and net income may be affected due to rise in commodity
costs and volatile economic conditions.
At present, Bemis has a Zacks Rank #3 (Hold).
Key Picks from the Sector
Some better-ranked stocks worth considering at the moment include
Berry Plastics Group, Inc.
Crown Holdings Inc.
KapStone Paper and Packaging Corp.
). All of these have a Zacks Rank #2 (Buy).
BERRY PLASTICS (BERY): Free Stock Analysis
BEMIS (BMS): Free Stock Analysis Report
CROWN HLDGS INC (CCK): Free Stock Analysis
KAPSTONE PAPER (KS): Free Stock Analysis
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