Sonoco Products Rewards Shareholders With 5% Quarterly Dividend Boost (SON)
By: Ned Piplovic,
Sonoco Products Company (NYSE:SON) capped two decades of uninterrupted annual dividend hikes with a 5.1% enhancement of its quarterly dividend payouts, which currently yields 3.2%.
The Sonoco Products Company’s current yield outperforms the company’s own five-year average yield, as well as average yields of the company’s industry and sector peers. In addition to the rising dividend income distributions, the company rewarded its shareholders with a share price growth that, aside from a little volatility, kept pace with the growing dividend payouts for a small total return over the last 12 months and double-digit-percentage total returns over the past three and five years.
Sonoco Products Company scheduled its next pay date for June 8, 2018, when the company will distribute its next installment of dividend payouts to all shareholders of record prior to the company’s next ex-dividend date, which is set for May 10, 2018.
Sonoco Products Company (NYSE:SON)
Founded in 1899 and headquartered in Hartsville, South Carolina, the Sonoco Products Company manufactures and sells industrial and consumer packaging products Internationally. The company operates through four business segments. The Consumer Packaging segment offers composite and thermoformed plastic containers and trays, extruded and injection-molded plastic products and brand artwork management. Additionally, the company’s Display and Packaging segment manufactures and distributes point-of-purchase displays, retail packaging and other paper products, such as coasters and glass covers. This segment also offers supply chain management services comprising contract packing, fulfillment and scalable service center services. Furthermore, the Paper and Industrial Converted Products segment provides paperboard and fiber-based construction tubes and forms, recycled paperboard, corrugating medium and recovered paper, as well as wooden, metal and composite wire for cable reels and spools. The Protective Solutions segment provides paperboard-based and expanded foam protective packaging and components, as well as temperature-assured packaging products.
The company hiked its quarterly dividend payout 5.1% from the previous period’s $0.39 amount to the current $0.41 distribution. This new quarterly dividend amount converts to a $1.64 annualized dividend payout and a 3.2% forward yield, which is more than 10% above the company’s own 2.9% average yield over the past five years. Additionally, the Sonoco Products Company’s current yield is on par with the 3.29% average yield of only dividend paying companies in the Paper & Paper Products market segment but 32% higher than the 2.42% average yield of all the companies in the segment and 66% above the 1.93% average yield of the entire Consumer Goods sector.
Since the company started its current streak of consecutive annual dividend hikes, it has advanced its total annual dividend distribution at a compounded average rate of 4.2% per year. Over that period, the company enhanced its total annual distribution nearly 130% from the $0.72 annualized payout in 1998 to the current $1.64 payout.
While the company’s share price did experience some volatility over the last five years, the general trend was a steady upward growth. However, the volatility was more pronounced in the past 12 months because of the overall market volatility and several selloffs in in 2018. The Sonoco Products Company’s share price dropped more than 10% at the onset of the trailing 12-month period to close at $47.15 on August 24, 2017, which was the 52-week low at that time. After that decline, the share price reversed direction, gained 17.6% by December 4, 2017, and closed at its 52-week high of $55.45.
The share price fluctuated between the peak level and $53 until January 25, 2018, and then fell 16% towards establishing a new 52-week low of $46.60 on March 22, 2018. Since hitting its new bottom in mid-March, the share price recovered 53% of its recent losses and closed on May 2, 2018 at $51.27, which was just 7.5% below the December peak price and 2.3% lower than it was 12 months earlier. Additionally, the $51.27 closing price was 10% above the 52-week low from mid-March and 45% higher than it was five years ago.
The share price decline in February and March limited shareholders’ total return over the last 12 months to just 2.6%. The total returns over the past three and five years were significantly higher at 25.6% and 70%, respectively.
Dividend increases and dividend decreases, new dividend announcements, dividend suspensions and other dividend changes occur daily. To make sure you don’t miss any important announcements, sign up for our E-mail Alerts. Let us do the hard work of gathering the data and sending the relevant information directly to your inbox.
In addition to E-mail Alerts, you will have access to our powerful dividend research tools. Take a quick video tour of the tools suite.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.