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11 Best Packaging Stocks to Buy Now

In this article, we discuss 11 best packaging stocks to buy now. You can skip our detailed analysis of the packaging industry and its performance over the years, and go directly to read 5 Best Packaging Stocks to Buy Now

The packaging industry in the US is a significant sector that plays a crucial role in various industries, including food and beverage, pharmaceuticals, consumer goods, electronics, and more. The sector has experienced steady growth over the years, driven by factors like e-commerce expansion, increased consumer spending, and technological advancements. According to a report by Markets and Research, the US packaging industry was worth $184.6 billion in 2021 and is expected to grow at a CAGR of 2.94% by 2027, reaching $218.1 billion.

The packaging industry is characterized by ongoing trends that reflect changing consumer preferences and market demands. Sustainability has become a major focus in the industry. Consumers are increasingly concerned about environmental impact, leading to a rise in demand for sustainable packaging solutions. McKinsey & Company conducted a comprehensive global survey and interviewed executives from various sectors of the packaging industry to gather insights and perspectives. About 43% of the respondents in the survey prioritize the environmental impact of packaging as an extremely or very important factor when they make purchasing decisions. The survey also highlighted that a significant number of consumers are willing to pay a higher price for sustainable packaging. Across different product categories, 4 to 7 percent of consumers are willing to pay a premium exceeding 10 percent.

Also read: 15 Biggest Packaging Companies in the World

The emergence of the pandemic in 2020 has led to the expansion of online shopping, consequently fueling the growth of the e-commerce packaging sector. Packaging solutions that prioritize protection, efficient use of space, easy product identification, and hassle-free returns are in high demand. Additionally, brands are leveraging packaging as an opportunity to create unboxing experiences that leave a lasting impression on customers. Data shows that the e-commerce packaging market was valued at $42.2 billion in 2022 and is projected to grow at a CAGR of 5.7% from 2022 to 2029.

In 2022, the market faced challenges due to high-interest rates and increasing inflation, which harmed various sectors, including packaging stocks. The performance of packaging stocks was not immune to these prevailing economic conditions. Some of the best packaging stocks like WestRock Company (NYSE:WRK), International Paper Company (NYSE:IP), and Sealed Air Corporation (NYSE:SEE) sharply declined last year. The Dow Jones Containers & Packaging Index, which tracks the performance of companies operating in the containers and packaging industry, declined by 9.83% in the past 12 months and 2.58% year-to-date. However, given that packaging companies are generally mature and known for providing stable dividends, they are anticipated to regain solid ground and strengthen their position in the market this year. In view of this, we have compiled a list of some of the best packaging stocks to buy now.

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Our Methodology: 

For this article, we scanned Insider Monkey’s database of 943 hedge funds as of Q1 2023 and picked companies that are involved in metal, glass, or plastic containers, as well as manufacturers of paper and cardboard containers and packaging. From that list, we picked 11 stocks with the highest number of hedge fund investors and ranked them in ascending order of hedge funds’ sentiment towards them.

11. Packaging Corporation of America (NYSE:PKG)

Number of Hedge Fund Holders: 18

Packaging Corporation of America (NYSE:PKG) is an American company that specializes in packaging solutions and paper products. It is one of the largest producers of containerboard and corrugated packaging products in the US. In the first quarter of 2023, the company reported revenue of $1.98 billion, which fell by 7.5% from the same period last year. Its net income for the quarter came in at $198 million. It is one of the best packaging stocks on our list alongside WestRock Company (NYSE:WRK), International Paper Company (NYSE:IP), and Sealed Air Corporation (NYSE:SEE).

Packaging Corporation of America (NYSE:PKG) is also a dividend payer and has been raising its dividends consistently for the past 12 years. The company currently pays a quarterly dividend of $1.25 per share and has a dividend yield of 3.77%, as of July 4.

At the end of Q1 2023, 18 hedge funds tracked by Insider Monkey reported having stakes in Packaging Corporation of America (NYSE:PKG), compared with 22 in the previous quarter. These stakes have a total value of over $86.4 million. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q1.

10. Sonoco Products Company (NYSE:SON)

Number of Hedge Fund Holders: 18

Sonoco Products Company (NYSE:SON) is a South Carolina-based global provider of diversified consumer packaging, industrial products, and packaging services. The company currently pays a quarterly dividend of $0.51 per share, having raised it by 4.1% in April this year. This marked the company’s 40th consecutive year of dividend growth. The stock’s dividend yield on July 4 came in at 3.42%.

Sonoco Products Company (NYSE:SON), one of the best packaging stocks, posted an EPS of $1.40 in the first quarter of 2023, which beat Street estimates by $0.08. The company’s cash position also remained strong as it reported an operating cash flow of $98 million and a free cash flow of $86 million. Its cash flow was sufficient to cover dividend payments of $48 million during the quarter.

As of the close of Q1 2023, 18 hedge funds tracked by Insider Monkey were long Sonoco Products Company (NYSE:SON), up from 17 a quarter earlier. The stakes owned by these hedge funds have a collective value of over $140.6 million.

9. Amcor plc (NYSE:AMCR)

Number of Hedge Fund Holders: 22

Amcor plc (NYSE:AMCR) is a multinational packaging company that provides a wide range of packaging solutions and services. The company manufactures flexibles, rigid plastics, specialty cartons, and other packaging products. The company remained committed to its shareholder return in its fiscal Q3 2023, as it returned $745 million to shareholders through dividends and share repurchases. Its revenue for the quarter came in at $3.6 billion, declining by 1.1% from the same period last year.

One of the best packaging stocks, Amcor plc (NYSE:AMCR) has been growing its dividends consistently for the past 39 years. It currently pays a quarterly dividend of $0.1225 per share for a dividend yield of 4.86%, as of July 4.

At the end of March 31, 22 hedge funds in Insider Monkey’s database owned stakes in Amcor plc (NYSE:AMCR), worth collectively over $244.5 million. With roughly 15 million shares, Polaris Capital Management is the company’s leading stakeholder in Q1.

8. International Paper Company (NYSE:IP)

Number of Hedge Fund Holders: 25

International Paper Company (NYSE:IP) is one of the world’s leading producers of fiber-based packaging, pulp, and paper products. The company specializes in industrial packaging, global cellulose fibers, printing, and packaging papers. It is one of the best packaging stocks on our list.

In April, RBC Capital upgraded International Paper Company (NYSE:IP) to Outperform with a $39 price target. The firm believes that the company is well-positioned to benefit from a possible recovery of industrial packaging and also appreciated its dividend yield.

On May 9, International Paper Company (NYSE:IP) declared a quarterly dividend of $0.4625 per share, which was in line with its previous dividend. The stock’s dividend yield on July 4 came in at 5.78%.

According to Insider Monkey’s database of Q1 2023, 25 hedge funds owned stakes in International Paper Company (NYSE:IP) with a collective value of roughly $440 million. With over 6.3 million shares, Greenhaven Associates was the company’s leading stakeholder in Q1.

7. AptarGroup, Inc. (NYSE:ATR)

Number of Hedge Fund Holders: 26

AptarGroup, Inc. (NYSE:ATR) is next on our list of the best packaging stocks. The company develops and manufactures innovative dispensing systems and packaging solutions for the consumer goods, healthcare, and beauty industries.

AptarGroup, Inc. (NYSE:ATR) reported strong earnings in the first quarter of 2023. The company reported revenue of $860 million, which showed a 2% growth from the same period last year and also beat analysts’ estimates by $30.1 million. The company’s operating cash flow also grew to $98 million, from $92 million in the prior-year period.

AptarGroup, Inc. (NYSE:ATR) holds a 29-year streak of consistent dividend growth and currently pays a quarterly dividend of $0.38 per share. The company’s shares have a yield of 1.30%, as recorded on July 4.

The number of hedge funds tracked by Insider Monkey owning stakes in AptarGroup, Inc. (NYSE:ATR) grew to 26 in Q1 2023, from 22 in the previous quarter. These stakes are collectively worth over $316.4 million.

6. Graphic Packaging Holding Company (NYSE:GPK)

Number of Hedge Fund Holders: 30

Graphic Packaging Holding Company (NYSE:GPK) ranks sixth on our list of the best packaging stocks as the company provides packaging solutions primarily for the food, beverage, and consumer products industries. It also specializes in designing and manufacturing a wide range of paperboard-based packaging products. In addition to GPK, WestRock Company (NYSE:WRK), International Paper Company (NYSE:IP), and Sealed Air Corporation (NYSE:SEE) are some other best packaging stocks to look for.

In the first quarter of 2023, Graphic Packaging Holding Company (NYSE:GPK) reported revenue of $2.44 billion, up 9% from the same period last year. The company ended the quarter with cash and cash equivalents of $113 million. Its operating cash flow jumped to $60 million, from $18 million in the prior-year period.

Graphic Packaging Holding Company (NYSE:GPK) is also a dividend company and pays a quarterly dividend of $0.10 per share. The stock’s dividend yield on July 4 came in at 1.64%.

As of the close of Q1 2023, 30 hedge funds in Insider Monkey’s database reported having stakes in Graphic Packaging Holding Company (NYSE:GPK), with a total value of over $840.2 million. Ian Simm, Ricky Sandler, and D. E. Shaw were some of the company’s leading stakeholders in Q1.

Click to continue reading and see 5 Best Packaging Stocks to Buy Now

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Disclosure. None. 11 Best Packaging Stocks to Buy Now is originally published on Insider Monkey.

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