Packaging Corporation of America (NYSE: PKG) has rewarded its shareholders by announcing a hike in its annual dividend rate. The manufacturer of containerboard products has been offering incremental dividends for the last 13 years.
Shares of this $14.2-billion company closed at $151.02 on Wednesday.
Inside the Headlines
The company’s annual dividend rate has been increased to $5 per share from the earlier rate of $4 per share. This represents a rise of 25% in the annual rate. Consequently, the company’s quarterly dividend rate now comes at $1.25 per share, higher than the previous rate of $1 per share.
The new quarterly dividend will be paid on July 15, 2022, to all shareholders in the company’s record as of June 15.
Packaging Corporation’s Chairman and CEO, Mark W. Kowlzan, said, “Today’s announcement of an increase in our dividend demonstrates PCA’s overall operational and financial strength, as well as our disciplined and balanced approach to capital allocation.”
Quick Snapshot
Packaging Corporation rewarded shareholders with dividend payments of $379.8 million in 2021 and $93.6 million in the first quarter of 2022. In December 2020, the company raised its annual dividend rate by 27% to $4 per share from $3.16 per share.
In addition to dividend payments, the company rewards its shareholders by buying back its common shares. In 2021, the company bought back shares worth $193 million. It refrained from repurchasing shares in the first quarter of 2022. Exiting the first quarter, the company was left with a buyback program of $1 billion.
Analysts’ Take
A few days ago, David Coleman of Argus Research maintained a Buy rating on PKG while increasing the price target to $176 (16.54% upside potential) from $160.
Overall, the Street has a Moderate Buy consensus rating on the stock based on three Buys and six Holds. PKG’s average price target of $170.25 suggests 12.73% upside potential from current levels. Shares of the company have inched up 0.2% over the past year.
Bloggers’ Stance
Per the TipRanks tool, 83% of the financial bloggers tracking PKG on TipRanks are Bullish on the stock, compared with the sector average of 78%.
Conclusion
Packaging Corporation of America’s commitment to generating value for its shareholders is expected to enhance its investment appeal.
Discover new investment ideas with data you can trust.
Read full Disclaimer & Disclosure
Related News:
ZIM Ships Encouraging Outlook on Record Quarterly Results
2 “Perfect 10” Stocks that can be Smart Additions to Your Portfolio
Analog Devices Exceeds Q2 Expectations, but Stock Slips 2.4%
