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Trade-Ideas: Packaging Corporation Of America (PKG) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Packaging Corporation of America ( PKG) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Packaging Corporation of America as such a stock due to the following factors:

  • PKG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.3 million.
  • PKG is up 2.5% today from today's close.

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More details on PKG:

Packaging Corporation of America engages in the manufacture and sale of containerboard and corrugated packaging products for industrial and consumer markets in the United States. The stock currently has a dividend yield of 2.7%. PKG has a PE ratio of 25.2. Currently there are 3 analysts that rate Packaging Corporation of America a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Packaging Corporation of America has been 885,300 shares per day over the past 30 days. Packaging Corporation of America has a market cap of $5.7 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.10 and a short float of 2.1% with 1.79 days to cover. Shares are up 51.5% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Packaging Corporation of America as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • PKG's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 12.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, PKG has a quick ratio of 2.26, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Containers & Packaging industry and the overall market, PACKAGING CORP OF AMERICA's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • PACKAGING CORP OF AMERICA has improved earnings per share by 43.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, PACKAGING CORP OF AMERICA increased its bottom line by earning $1.68 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $1.68).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Containers & Packaging industry average. The net income increased by 42.8% when compared to the same quarter one year prior, rising from $45.15 million to $64.47 million.

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