Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Sonoco Products Company’s (NYSE:SON) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for Sonoco Products

Could SON beat the long-term trend and outperform its industry?

To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to assess many different companies on a more comparable basis, using the most relevant data points. Sonoco Products’s most recent bottom-line is $275M, which, relative to the prior year’s level, has jumped up by 15.65%. Since these values are somewhat short-term, I have created an annualized five-year value for Sonoco Products’s net income, which stands at $227M. This shows that, on average, Sonoco Products has been able to increasingly improve its net income over the last couple of years as well.

How has it been able to do this? Well, let’s take a look at if it is merely due to industry tailwinds, or if Sonoco Products has seen some company-specific growth. In the last couple of years, Sonoco Products expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US containers and packaging industry has been growing its average earnings by double-digit 13.49% over the prior twelve months, and a more subdued 5.95% over the past five years. This suggests that any uplift the industry is profiting from, Sonoco Products is able to amplify this to its advantage.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Sonoco Products gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Sonoco Products to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for SON’s future growth? Take a look at our free research report of analyst consensus for SON’s outlook.

2. Financial Health: Is SON’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.