Street Expects Rock-Tenn To Double EPS Over Two Years


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Upward revisions in earnings estimates are always nice to see, and in the stock market today , paper producers are favored.

Among higher-rated stocks in that space,Rock-Tenn ( RKT ) has seen EPS estimates revised upward for each of the next two fiscal years.

The Street expects Rock to boost earnings 43% in fiscal 2013 ending in September. In fiscal 2014, analysts expect 42% growth.

If those views prove accurate, Rock-Tenn will more than double the $4.49 a share the company earned in fiscal 2012.

No other stock in the group has such high expectations for both years.

Rock-Tenn is a midcap manufacturer of corrugated and consumer packaging. The company passes the Jack Welch test. The former General Electric CEO used to say that a company should strive to be No. 1 or No. 2 in a business segment, or get out of that segment.

In North America, Rock-Tenn is the No. 1 producer of merchandising displays and No. 1 in solid fiber partitions. The company is No. 2 in folding cartons and No. 2 in coated recycled paperboard.

The company's three- and five-year Earnings Stability Factors are 8 and 16. The gauge runs from zero (calm) to 99 (wild).

Based in Norcross, Ga., the company has tripled its quarterly dividend payout since August 2009. Four increases boosted the payout from 10 cents a share to 30 cents a share.

The current annualized yield is 1.2% vs. 2.4% for the S&P 500.

The stock's chart does not currently offer a valid entry. However, the stock has been consolidating for almost four weeks. Action has been tight, and volume in the decline has been quiet.

With a little time, Rock-Tenn could form a second-stage flat base.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Investing Ideas

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