Packaged!

Online shopping and residential delivery were on the rise well before the coronavirus pandemic.  However, the ensuing stay-at-home and remote work polices sent consumers into a buying frenzy that led industry analysts to lift estimates for the packaging needed carry all those orders from warehouse to ‘your house’.  The industry is expected to grow at a compound annual rate of 3.6% through 2025 and reach at least $170.6 billion in sales value.

The packaging sector may seem to some as an odd corner to seek environmentally sound investments.  This is a large industry and one that should not be overlooked just because its merits are not at first easily observed.  Could there be any sort of conservatism in products like cardboard boxes and plastic bubble wrap that are used one and sent to the landfill?  This post looks at packaging producers for returns to shareholders in terms of growth and dividend income with a mention of environmental conscientiousness as shown by an active environment and sustainability policies.

 

COMPANY	SYMB	RETURN ON EQUITY	SALES to CASH CONVERT	DIVIDEND YIELD	ESG REPORT	ESG GOAL
Amcor Plc	AMCR	15.26%	11.86%	4.06%	2012-20	100% recyclable products by 2025
Ball Corp.	BLL	18.31%	12.14%	0.71%	2013-20	GHG reductions over next five years
Berry Global	Pvt	na	na	na	na	Internal sustainability policy
Coveris	Pvt	na	na	na	na	Internal sustainability policy
Crown Holdings	CCK	29.30%	11.40%	0.82%	2020	Twentyby30 Plan for 20 goals by 2030
DS Smith	Pvt	na	na	na	na	100% circular economy for consumer packaging by 2030
Graphic Packaging	GPK	9.67%	12.57%	1.65%	2019	15% reduction in GHG emissions, fossil fuel use, water use per saleable ton
Internat’l Paper	IP	6.19%	14.87%	3.72%	na	Carbon neutrality, recycling
Mondi Plc	MONDY	13.73%	19.75%	3.95%	2020	24% carbon reduction, 67% renewable fuel
O-I Glass, Inc.	OI	54.72%	7.50%	0.36%	2020	50% recycled content by 2030; 40% renewable energy by 2030
Packaging Corp. of Amer.	PKG	14.60%	15.47%	2.95%	2017-2019	Recycling and renewable energy efforts
Reynolds	REYN	91.09%	9.79%	3.04%	na	100% recycled aluminum
Silgan Holdings	SLGN	27.13%	12.255	1.30%	na	Reduce electricity consumption by 5% KWH per pound production
Smurfit Kappa	SKG.L	16.14%	14.64%	2.92%	2012-2019	Reduce CO2 emissions by 40K tons
Stora Enso	STERV.HE	7.61%	13.22%	1.80%	2014-2020	31% reduction in CO2 emissions by 2030
WestRock Co.	WRK	-5.90%	13.44%	1.54%	2017-2019	Reduce CO2 emissions by 20% per production ton

    

Surprise, surprise. It appears the packaging sector is at least trying to do right by the environment.  At least 90% of the largest companies in the sector have active environmental and sustainability goals in place that call for the reduction in greenhouse gas emissions, an increase in the use of renewable fuels, and the reduction in water usage.  Whether they achieve these goals or not is another question.  Only about half of the reports noted in the table disclose data on goal achievement through the date of the company’s last sustainability report.

 

In the next post we will look more closely at three of the companies in the list that appear to be fundamental powerhouses.

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.