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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Packaging Corporation Of America (XNYS:PKG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PKG
Name:
PACKAGING CORPORATION OF AMERICA (XNYS:PKG)
Sector:
112.10M
Industry:
Packaging & Containers
CEO:
Mr. Mark Kowlzan
Total Employees:
15,200
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -5.67% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PACKAGING CORPORATION OF AMERICA(PKG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGING & CONTAINERS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
136.11
One Month Price Target:
$136.71
Six Month Price Target :
$139.7
Likely Price in One Year's Time:
Ticker:
$143.29
Likely Trading Range Today Under (Normal Volatility)
$135.69
Price Upper limit ($) :
$136.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$130.29
This week:
$123.09
This month :
$110.06
Other Primary facts
Market Cap:
12.77B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
93.74M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.77%
-11.25%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$163.13
$150.69
$109.09
$121.53
Medium risk (<10%) entry points
Buy Call
Sell Call
$146.64
Buy Put:
Sell Put:
$143.99
$125.54
$128.23
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PKG
Sharpe Ratio:
2.00%
Comparison:
PKG, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 27.70% higher than the industry
& is -12.31% lower than the market/S&P 500 average
Average Returns/Yield of
PKG
Daily returns:
0.05%
Weekly returns:
0.25%
Monthly returns:
1.02%
Yearly returns:
11.46%
Comparison of returns:
Average annual returns/yield (last 3 years) is 6.83% above industry average
Classification:
PKG, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.87
Statistical test of Returns:
PKG has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.11%
Weekly Volatility:
4.71%
Monthly Volatility:
9.43%
Yearly Volatility:
32.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.03%
Volatility in last five trading days has been -50.97% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.28%
Weekly VaR:
-9.57%
Monthly VaR:
-19.14%
How Much Can the price of
PKG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-66.29%
This translates to price declining to:
$113.87
This translates to price declining to:
$45.88
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PKG is a 35.07% riskier investment compared to the market/S&P 500 & is 15.71% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.65% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PKG
Beta in relation to market/S&P 500--0.79
Expected beta in 1 year's time:
0.548
Expected beta in 3 year's time:
0.775
Unlevered (debt free) Beta:
0.511
Beta in relation to Nasdaq (XNAS):
0.556
Beta in relation to all global stocks::
0.692
Beta Comparison & Analysis
Beta of competitors/peers::
1.327
Beta is -40.79% lower than peers
Average Industry Beta:
1.004
Beta is -21.73% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.58%
Sustainable growth rate is -63.85% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.037
Alpha is 159.06% above industry average alpha yield
Alpha is 236% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PKG
Equity cost of capital:
0.085
Equity cost of capital is -14.90% below industry mean WACC
Unlevered (without debt) cost of capital:
5.55%
Before-tax cost of debt:
5.39%
After-tax cost of debt:
4.26%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.26%
WACC is 6.50% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$85.98
Revenue growth rate per share of (3Y):
3.38
Annual revenue growth rate is -13.14% below industry average
EPS:
$9.81
Expected Annual growth rate of EPS (3Y):
6.26%
Expected future EPS growth rate is -32.03% lower than the Packaging & Containers industry
Free cash flow (FCF) per share:
$5.28
Balance sheet equity growth per share: 39.56%
Equity growth rate per share is 233.40% higher than the industry
Debt per share
$28.66
EBITDA per share
$21.45
Valuation Analysis Today of
PKG
P/E Ratio:
12.59
P/E Ratio of Competitors/Peers:
14.88
P/E ratio is -15.40% lower than main peers & is -36.00% lower than the industry
Stock price/value with industry average P/E ratio: $192.90
PKG is -29.44% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $161.21
Present value of the expected future dividends only: $132.59
P/S (Price to Sales ratio):
1.58
Price to sales ratio is 27.04% above the industry mean
P/B (Price to book value ratio):
3.38
Price to free cash flow: 25.80
Price to free cash flow ratio is -74.45% lower than the industry
Net income growth rate (3Y):
12.51%
Net income growth rate is -145.90% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 10.08%
Dividend yeild: 3.12%
Previous Dividend: $1.25
Previous adjusted dividend: $1.25
Previous Dividend: $4.25
Expected next dividend best case: $1.37
Expected next dividend worst case: $1.13
Average dividend payment (long-term): $0.95
Average dividend increase/decrease (growth rate) % per period: 5.16%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$1.25
2021-12-17--$1.00
2021-06-14--$1.00
2022-03-14--$1.00
2021-09-14--$1.00
2021-03-12--$1.00
Dividend growth rate is -33.19% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
71.09%
Net debt to equity ratio:
56.35%
Debt to assets ratio:
33.02%
Net debt to assets ratio:
26.17%
Debt-to-asset ratio is -50.62% below industry average
Ability to repay debt:
Interest coverage ratio:
13.51
Interest coverage ratio is 140.43% more than industry average
Looking forward:
Debt growth rate:
-94.67%
Annual debt growth is 1036% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.01%
Analysis of Key Statistics
Correlation of price movement with the market:
0.627
Statistical significance of correlation:
PKG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is 12.72% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.556
Correlation of price movement with Nasdaq (^IXIC):
0.021
Covariance of price movement with the market:
0.026
Kurtosis
7.479
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.631
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
PKG
Gross Profit Margin Ratio:
99%
Operating Profit Margin Ratio:
16.87%
Operating profit margin is 156.12% higher than the industry
Net Profit Margin Ratio:
99%
Effective Tax Rate:
24.46%
Effective tax rate is -32.26% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
24.57%
Return on equity (ROE) is -51.20% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.41%
Return on assets (ROA) is 119.49% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
2.96
Current ratio is 88.43% above industry average
Cash Conversion Cycle (days):
36.3
Cash conversion cycle is -42.97% below industry average
The remaining useful life of property plant & equipment is: 3.3 years
Stock based compensation to net income ratio:
1.32%
In-depth Efficiency Analysis
Revenue generated per employee:
530.2K
Each employee generates -83% less revenue than industry average revenue per employee
EBITDA generated per employee:
132.3K
Each employee generates -77% less EBITDA than industry average revenue per employee
Profit generated per employee:
61.1K
Each employee generates -78% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
7.4K
Each employee generates -145% less free cash flow than industry average revenue per employee
Assets/Capital per employee
346.6K
Each employee generates -145% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PKG
PULTEGROUP, INC. (XNYS:PHM)
INTERCONTINENTAL HOTELS GROUP PLC (XNYS:IHG)
VAIL RESORTS, INC. (XNYS:MTN)
WHIRLPOOL CORPORATION (XNYS:WHR)
WESTROCK COMPANY (XNYS:WRK)
CROWN HOLDINGS, INC. (XNYS:CCK)
FLOOR & DECOR HOLDINGS, INC. (XNYS:FND)
MOHAWK INDUSTRIES, INC. (XNYS:MHK)
BORGWARNER INC. (XNYS:BWA)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�46%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.06B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.06B
2.00B
-
-
593.00M
-
-
593.00M
-
148.80M
632.30M
2.01B
1.36B
928.70M
1.23B
300.70M
928.70M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
22.90M
Stock Based Compensation :
12.30M
Change in Working Capital :
- 81700.00K
Accounts Receivables:
- 69600.00K
Other Working Capital:
45.60M
Other Non-Cash Items:
117.60M
Net Cash Provided by Operating Activities:
325.30M
Investments in PP&E:
- 213200.00K
Net Acquisitions:
-
Purchases of Investments:
- 36400.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
628.60M
81.30M
709.90M
1.14B
941.20M
77.60M
2.87B
3.94B
923.10M
298.20M
68.50M
-
43.50M
5.27B
-
8.14B
546.70M
71.50M
61.10M
-
349.70M
967.90M
2.69B
215.00M
3.39B
-
4.36B
900.00K
3.26B
- 75200.0K
-
March 31, 2022 at 6:00:00 AM
6.65B
3.78B
8.14B
149.80M
2.76B
2.1B
30.60M
- 2200.00K
- 221200.00K
- 400.00K
-
- 200.00K
- 93600.00K
-
- 94200.00K
-
9.90M
628.60M
618.70M
325.30M
- 213200.00K
112.10M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
PKG
2023
2024
2025
2026
2027
$161.12
$169.63
$178.58
$188.01
$197.93