Packaging Corporation of America
Packaging Corporation of America Fundamental Analysis
Packaging Corporation of America (PKG) shows moderate financial fundamentals with a PE ratio of 27.59, profit margin of 8.60%, and ROE of 16.91%. The company generates $9.0B in annual revenue with moderate year-over-year growth of 7.45%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 63.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze PKG's fundamental strength across five key dimensions:
Efficiency Score
WeakPKG struggles to generate sufficient returns from assets.
Valuation Score
ModeratePKG shows balanced valuation metrics.
Growth Score
ModeratePKG shows steady but slowing expansion.
Financial Health Score
ExcellentPKG maintains a strong and stable balance sheet.
Profitability Score
ModeratePKG maintains healthy but balanced margins.
Key Financial Metrics
Is PKG Expensive or Cheap?
P/E Ratio
PKG trades at 27.59 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, PKG's PEG of -2.06 indicates potential undervaluation.
Price to Book
The market values Packaging Corporation of America at 4.49 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.00 times EBITDA. This is generally considered low.
How Well Does PKG Make Money?
Net Profit Margin
For every $100 in sales, Packaging Corporation of America keeps $8.60 as profit after all expenses.
Operating Margin
Core operations generate 13.58 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.91 in profit for every $100 of shareholder equity.
ROA
Packaging Corporation of America generates $7.04 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Packaging Corporation of America produces operating cash flow of $1.44B, showing steady but balanced cash generation.
Free Cash Flow
Packaging Corporation of America produces free cash flow of $724.59M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $8.05 in free cash annually.
FCF Yield
PKG converts 3.40% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
27.59
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.49
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.37
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.92
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.16
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How PKG Stacks Against Its Sector Peers
| Metric | PKG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 27.59 | 25.25 | Neutral |
| ROE | 16.91% | 1170.00% | Weak |
| Net Margin | 8.60% | 742.00% | Weak |
| Debt/Equity | 0.92 | 0.77 | Neutral |
| Current Ratio | 3.16 | 9.19 | Strong Liquidity |
| ROA | 7.04% | -6467.00% (disorted) | Weak |
PKG outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Packaging Corporation of America's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
26.73%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
21.71%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
3.86%
Industry Style: Cyclical, Growth, Discretionary
Growing