Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Packaging Corporation of America (PKG)

Company Dividend Discount ModelIndustry: Packaging & ContainersSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$160.23 - $312.57$220.61
Multi-Stage$225.64 - $247.45$236.34
Blended Fair Value$228.48
Current Price$217.93
Upside4.84%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.48%11.05%5.005.004.684.233.343.332.992.652.412.24
YoY Growth---0.02%6.80%10.66%26.77%0.30%11.41%12.84%9.95%7.62%27.57%
Dividend Yield--2.52%2.65%3.37%2.71%2.48%3.83%2.91%2.35%2.63%3.70%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)893.30
(-) Cash Dividends Paid (M)449.40
(=) Cash Retained (M)443.90
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)178.66111.6667.00
Cash Retained (M)443.90443.90443.90
(-) Cash Required (M)-178.66-111.66-67.00
(=) Excess Retained (M)265.24332.24376.90
(/) Shares Outstanding (M)89.8089.8089.80
(=) Excess Retained per Share2.953.704.20
LTM Dividend per Share5.005.005.00
(+) Excess Retained per Share2.953.704.20
(=) Adjusted Dividend7.968.709.20
WACC / Discount Rate6.83%6.83%6.83%
Growth Rate1.78%2.78%3.78%
Fair Value$160.23$220.61$312.57
Upside / Downside-26.48%1.23%43.43%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)893.30918.12943.63969.85996.801,024.491,055.23
Payout Ratio50.31%58.25%66.18%74.12%82.06%90.00%92.50%
Projected Dividends (M)449.40534.77624.54718.88817.99922.04976.09

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.83%6.83%6.83%
Growth Rate1.78%2.78%3.78%
Year 1 PV (M)495.69500.56505.43
Year 2 PV (M)536.60547.20557.90
Year 3 PV (M)572.53589.57606.95
Year 4 PV (M)603.85627.94652.73
Year 5 PV (M)630.93662.54695.40
PV of Terminal Value (M)17,422.3618,295.2419,202.76
Equity Value (M)20,261.9621,223.0522,221.18
Shares Outstanding (M)89.8089.8089.80
Fair Value$225.64$236.34$247.45
Upside / Downside3.54%8.45%13.55%

High-Yield Dividend Screener

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