Packaging Corporation of America
), the fourth largest containerboard and corrugated packaging
manufacturer in the U.S., recently announced a 28% year over year
hike in its annual dividend payout to $1.60 per share on an
annualized basis. The first quarter 2013 cash dividend of 40
cents is payable on July 15 to shareholders of record as of Jun
Based on the closing price of $49.81 on May 16, 2013, the
proposed dividend affirms a yield of 3.2%. A steady dividend
payout is part of the long-term strategy of Packaging Corporation
to provide attractive risk-adjusted returns to its stockholders.
In addition, decent dividend increases at periodic intervals have
been one of the company's most attractive features.
The company had earlier raised the quarterly dividend payout from
25 cents to 31.3 cents per share or from $1.00 to $1.25 on an
annualized basis in March 2013. Prior to that, Packaging
Corporation raised its quarterly dividend in March 2012 from 20
cents to 25 cents per share.
The recent dividend hike follows strong quarterly results, with
Packaging Corporation reporting record net sales of $755.2
million in first quarter 2013. The superior performance was
attributable to increased corrugated products shipments, while
total production of containerboard rose 6,000 tons year over year
to 646,000 tons.
The increase in dividend payout also signifies the inherent
financial strength of the company, driven by a healthy execution
of operating plans. In addition, Packaging Corporation has a
healthy liquidity position with a cash balance of $268 million as
of Mar 31, 2013.
Packaging Corporation manufactures a diversified range of
corrugated products such as shipping containers, point-of-sale
graphics packaging, point-of-purchase displays and other
specialized packaging. The company operates 71 corrugated
products manufacturing plants and 4 paper mills across the
Packaging Corporation currently has a Zacks Rank #3 (Hold). Other
players in the industry worth mentioning include
Berry Plastics Group, Inc.
UFP Technologies, Inc.
Graphic Packaging Holding Company
), each carrying a Zacks Rank #2 (Buy).
BERRY PLASTICS (BERY): Free Stock Analysis
GRAPHIC PKG HLD (GPK): Free Stock Analysis
PACKAGING CORP (PKG): Free Stock Analysis
UFP TECH INC (UFPT): Free Stock Analysis
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