Daily Stock Pick: Sonoco Products
This week, I'm looking for the fifth materials representative of nine for my Ivy portfolio.
The materials sector includes includes thirteen industries all tied to the mining or manufacturing of basic stuff we need. Commodities: such as agricultural inputs, aluminum; building materials, chemicals, coal, copper, gold, industrial metals, lumber & wood, paper, silver, specialty chemicals, and steel.
Today I'm reviewing a mid-cap paper and paper products company named Sonoco Products Co. Its trading ticker symbol is SON.
Over its 100-year-plus history, Sonoco Products has steadily assembled a diverse portfolio of industrial and consumer packaging product offerings such as water-based functional coating solution to create recyclable, repulpable and compostable containers. The company serves a variety of consumer and industrial end markets throughout North America. Sonoco has raised its dividend each year for more than 30 years.
The company sells its products in various markets, which include paper, textile, film, food, chemical, packaging, construction, and wire and cable. Sonoco Products Company was founded in 1899 and is headquartered in Hartsville, South Carolina.
I use three key data points to gauge the value of any dividend equity-like Sonoco Products Co:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest.
Those first three primary keys, however, best tell whether a company has made, is making, and will make money.
SON Price
Sonoco's price per share closed at $64.02 Friday. A year ago its price was $52.20. Price rose $11.82 or 22.6% in the past year.
Assuming Sonoco's stock trades in the range of $52.00 to $68.00 this year,
Sonoco's recent $64.02 price could rise by $1.98 and go to $66.00 by early May 2020.
SON Dividends
Sonoco's most recent declared quarterly dividend was $0.41 declared April 17th and payable, June 10th.
a $0.41 Q dividend equates to an annual payout of $1.64 for a yield of 2.56% at Friday's $64.02 closing price.
Gains For SON?
Adding a $1.64 annual estimated dividend to my $1.98 estimate of
Sonoco's price upside shows a $3.62 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we pay a little over $1,000.00 today at the $64.02 recent stock price would buy us 16 Sonoco Products Co shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.63 per share.
Subtract that $0.63 brokerage cost from the estimated $3.62 gross annual gain leaves a net gain of $2.99 X 16 shares
= $47.84 or a 4.75% net gain on a $1,024.32 investment.
Therefore, Sonoco Products Co whose trading ticker symbol is SON now shows a possible net gain of 4.75% including a 2.56% dividend yield.
Twelve brokers cover this stock:
Three say "buy" SON.
Eight say "hold" SON.
One says "sell" SON. shares.
The consensus score is 2.67 or "hold".
Therefore, you can look at Sonoco Products Co and see it has made money, is making money, and could net 4.75% gains including a 2.56% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to determine if Sonoco Products Co is worth your time and money.
Disclosure: This article was compiled by Rydlun & ...
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