Daily Stock Pick: WestRock - Friday, May 10

This week, I'm looking for the fifth materials representative of nine for my Ivy portfolio.

The materials sector 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 WRKCo Inc or WestRock Company. Its trading ticker symbol is WRK.

WestRock manufactures corrugated packaging and consumer packagings such as folding cartons and paperboard. After the merger of RockTenn and MeadWestvaco in fall 2015, WestRock became the largest North American producer of solid bleached sulfate and the second-largest producer of containerboard, which is used in the production of shipping containers.

WestRock Company or WRKCo Inc is based in Atlanta, Georgia.

I use three key data points to gauge the value of any dividend equity-like WestRock Company:

(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.

WRK Price

WRK's price per share closed at $37.02 yesterday. A year ago its price was $60.11. Price fell $23.09 or 38.4% in the past year.

Assuming WRK's stock trades in the range of $30.00 to $50.00 this year.

WRK's recent $37.02 price could rise by $5.48 and go to $42.50 by early May 2020.

WRK Dividends

WRKCo's most recent declared quarterly dividend was $0.455 declared April 26th and payable, May 20th.

A $0.455 Q dividend equates to an annual payout of $1.82 for a yield of 4.9% at yesterday's $37.02 closing price.

Gains For WRK?

Adding a $1.82 annual estimated dividend to my $5.48 estimate of WRKCo's price upside shows a $7.30 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we pay a little under $1,000.00 today at the $37.02 recent stock price would buy us 27 WestRock Company shares.

A $10 broker fee paid half at purchase and half at sale will cost us $0.37 per share.

Subtract that $0.37 brokerage cost from the estimated $7.30 gross annual gain leaves a net gain of $6.93 X 27 shares = $187.11 or an 18.75% net gain on a $999.54 investment.

Therefore, WestRock Company or WRKCo Inc whose trading ticker symbol is WRK now shows a possible net gain of 18.75% including a 4.9% dividend yield.

Fifteen brokers cover WestRock Company's stock:

Two say "buy" WRK.

Two say WRK will "outperform" its peers.

Eleven say "hold" WRK.

The consensus score is 2.6 or "hold".

Therefore, you can look at WestRock Company and see it has made money, is making money, and could net an 18.75% gain including a 4.9% 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 WestRock Company is worth your time and money.

Disclosure: This article was compiled by Rydlun & Co., LLC from data derived from www.ycharts. com; www.finance.yahoo.com; analyst median target price by YCharts

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