WestRock (WRK) versus Sonoco (SON) Critical Review
WestRock (NYSE: WRK) and Sonoco (NYSE:SON) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
WestRock pays an annual dividend of $1.72 per share and has a dividend yield of 2.6%. Sonoco pays an annual dividend of $1.56 per share and has a dividend yield of 3.1%. WestRock pays out 65.6% of its earnings in the form of a dividend. Sonoco pays out 55.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. WestRock has increased its dividend for 2 consecutive years and Sonoco has increased its dividend for 37 consecutive years. Sonoco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares WestRock and Sonoco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and target prices for WestRock and Sonoco, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
WestRock currently has a consensus target price of $73.82, indicating a potential upside of 12.94%. Sonoco has a consensus target price of $53.71, indicating a potential upside of 7.73%. Given WestRock’s stronger consensus rating and higher possible upside, equities research analysts plainly believe WestRock is more favorable than Sonoco.
Insider & Institutional Ownership
88.5% of WestRock shares are owned by institutional investors. Comparatively, 70.8% of Sonoco shares are owned by institutional investors. 2.2% of WestRock shares are owned by insiders. Comparatively, 1.7% of Sonoco shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
This table compares WestRock and Sonoco’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|WestRock||$14.86 billion||1.12||$708.20 million||$2.62||24.95|
|Sonoco||$5.04 billion||0.98||$175.34 million||$2.79||17.87|
WestRock has higher revenue and earnings than Sonoco. Sonoco is trading at a lower price-to-earnings ratio than WestRock, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
WestRock has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Sonoco has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.
WestRock beats Sonoco on 12 of the 18 factors compared between the two stocks.
WestRock Company Profile
WestRock Company manufactures and sells paper and packaging solutions for the consumer and corrugated markets in North America, South America, Europe, Australia, and Asia. The company operates through three segments: Corrugated Packaging, Consumer Packaging, and Land and Development. The Corrugated Packaging segment produces containerboards, corrugated sheets, corrugated packaging, and preprinted linerboards for consumer and industrial products manufacturers, and corrugated box manufacturers. This segment also provides structural and graphic design, engineering services, and automated packaging machines; resells other products; and offers recycling and waste disposal services. Its corrugated packaging products are used to provide protective packaging for the shipment and distribution of food, paper, health and beauty, other household, consumer, commercial, and industrial products. The Consumer Packaging segment manufactures and sells folding and beverage cartons, displays, dispensing, and interior partitions; paperboards; recycled paperboards; express mail packages for the overnight courier industry; and secondary packages and paperboard packaging for the healthcare market. This segment also manufactures and sells solid fiber and corrugated partitions and die-cut paperboard components; temporary and permanent point-of-purchase displays for the consumer products and retail markets; lithographic laminated packaging products; and plastic packaging products, as well as provides contract packing services. The Land and Development segment engages in real estate development activities, primarily in Charleston, South Carolina. WestRock Company is based in Atlanta, Georgia.
Sonoco Company Profile
Sonoco Products Company manufactures and sells industrial and consumer packaging products in North and South America, Europe, Australia, and Asia. The company operates through four segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. The Consumer Packaging segment offers composite and thermoformed plastic round and shaped rigid containers and trays; extruded and injection-molded plastic products; printed flexible packaging products; brand artwork management; and metal and peelable membrane ends and closures. The Display and Packaging segment offers point-of-purchase displays; supply chain management services comprising contract packing, fulfillment, and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters, and heat sealing equipment; and paper amenities, such as coasters and glass covers. The Paper and Industrial Converted Products segment provides paperboard tubes and cores; fiber-based construction tubes and forms; wooden, metal, and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper, and material recycling services. The Protective Solutions segment provides custom-engineered, paperboard-based, and expanded foam protective packaging and components; and temperature-assured packaging products. 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.
Receive News & Ratings for WestRock Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for WestRock and related companies with MarketBeat.com's FREE daily email newsletter.