Packaging Corporation of America
) are nearing its 52-week high as the third-quarter earnings
release approaches. The manufacturer of containerboard and
corrugated products has beaten the Zacks Consensus Estimate for the
past five quarters. This Zacks #2 Rank (Buy) has also been
consistently distributing dividends, and currently has a solid 3.0%
Promising Outlook for Q3
Packaging Corporation of America is scheduled to report its
third-quarter results on October 15. In its second quarter report
from July 16, management projected earnings per share to be roughly
52 cents in the quarter, based on the expectations of higher
seasonal volumes, mill production and lower mill costs.
In that second quarter, Packaging Corporation of America reported
adjusted earnings per share of 49 cents, up 26% year over year and
6.5% above the Zacks Consensus Estimate of 46 cents. This marked
the fifth straight quarter with a positive earnings surprise.
Net revenues increased 7.0% year over year to $712.5 million.
Shipments of corrugated products were up 6.6%, including a 3.6%
increase from box plant acquisitions.
Earnings Estimates Move Higher
Over the past two months, the Zacks Consensus Estimate for 2012 has
advanced 3.6% to $2.02, including an increase of 2% in just the
past seven days. Meanwhile the Zacks Consensus Estimate for 2013 is
up 7.8% in 60 days to $2.48 per share, which also suggests
year-over-year improvement of nearly 23%.
As for the soon-to-be-announced third quarter, the Zacks Consensus
Estimate is currently at 56 cents per share, which is up 3.7% in 2
Regular dividend payments and increases at intervals have been one
of the company's most attractive features. The 5-Year average
dividend yield for Packaging Corporation of America stands at 4.3%,
while the stock currently yields a solid 3.0% based on an annual
dividend rate of $1.00 per share.
Packaging Corporation of America is currently trading at a forward
P/E of 17.6x compared with 16.3x for the peer group. The company's
PEG ratio is at 1.83. ROE stands at 18.2% compared with the peer
group average of 13.2%.
As can be observed from the Price & Consensus chart below, the
company reached a new peak in mid 2011. Prospects appear bright as
Zacks Consensus Estimates are trending higher for future years.
Solid second-quarter 2012 results and a promising outlook make
Packaging Corporation of America an attractive investment option.
Headquartered in Lake Forest, Illinois, Packaging Corporation of
America was incorporated in 1867. The $3.35 billion company
operates in the Packaging and Containers industry and manufactures
and sells containerboard and corrugated products in the United
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