Packaging Corporation of America
) recently declared a 25% year-over-year hike in its dividend
payout to a quarterly payment of 31.25 cents per share or $1.25
on an annualized basis. The first quarter 2013 dividend is
payable on Apr 15 to shareholders of record as of Mar 15.
Based on the closing price of $39.17 as of Jan 14, the proposed
dividend affirms a yield of 3.2%. A steady dividend payout
facilitates 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 hiked its dividend in first quarter 2012,
when it raised the quarterly dividend payout from 20 cents to 25
cents per share or from 80 cents to $1.00 on an annualized basis.
Prior to that, Packaging Corporation raised its quarterly
dividend in first quarter 2011 from 15 cents to 20 cents per
share, which equated to an annualized increase from 60 cents to
Headquartered in Lake Forest, Illinois, Packaging Corporation is
one of the leading containerboard and corrugated products
manufacturer in the U.S. Since its inception in 1867, the company
has expanded its operations across the length and breadth of the
country and currently operates four paper mills and 71 corrugated
product plants in 26 states.
The company produces diverse corrugated packaging products,
including conventional shipping containers that protect and
transport manufactured goods; multi-color boxes and displays that
help to merchandise the packaged product in retail locations; and
meat boxes and wax-coated boxes for the agricultural industry.
Packaging Corporation has recently raised the price of its
domestic containerboard and is likely to increase the price for
corrugated products as well. Considering this price rise,
management anticipates that earnings for the fourth quarter of
2012 will be roughly 61 cents per share. The current Zacks
Consensus Estimate for the upcoming quarter is pegged at 62
We maintain our Neutral recommendation on Packaging Corporation,
which presently has a Zacks Rank #2 (Buy). We also have a Neutral
recommendation and a Zacks Rank #3 (Hold) for
Bemis Company, Inc.
), one of the competitors of Packaging Corporation.
BEMIS (BMS): Free Stock Analysis Report
PACKAGING CORP (PKG): Free Stock Analysis
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