Some companies may take years before giving shareholders a
higher dividend. But that's not the case withPackaging Corp. of
), or PCA.
Last week, the company hiked its dividend for the second time
this year. Citing its operational and financial prowess, as well
as its commitment to deliver shareholder value, PCA lifted its
annual dividend by 28% to $1.60 a share. It will dole out a
quarterly installment of 40 cents a share July 15 to shareholders
of record June 14.
In January, PCA boosted its dividend by 25%.
At the new rate, PCA offers a yield of about 3.2% vs. around
2.4% for the S&P 500. PCA has the second highest yield among
the 13 dividend-paying stocks in the Paper & Paper Products
group. Only thinly tradedOrchids Paper Products (
) has a higher yield.
Based in Lake Forest, Ill., PCA makes containerboard,
corrugated containers, retail packing products and packing
supplies. The company has had a rocky track record of earnings in
recent years. In 2008 and 2009, profits fell 16% and 30%,
respectively. Its bottom line jumped 72% in 2010, but earnings
dipped in 2011 by a penny per share. Last year, profit climbed
PCA has a five-year Earnings Stability Factor of 26, which
isn't the most stable but still decent. It has now posted five
straight quarters of profit growth. Analysts polled by Thomson
Reuters see earnings jumping 43% to $2.95 a share this year.
PCA shares are trading near all-time highs, but they are
extended. The stock has tested its 10-week line multiple times
since breaking out from a flat base in December. Generally it's
OK to buy on the first or second bounce off the 10-week moving