Sonoco Products Company (SON): A Bull Case Theory 

We came across a bullish thesis on Sonoco Products Company on Compounding Dividends’s Substack by TJ Terwilliger. In this article, we will summarize the bulls’ thesis on SON. Sonoco Products Company’s share was trading at $47.64 as of January 13th. SON’s trailing and forward P/E were 25.75 and 7.94 respectively according to Yahoo Finance.

Sonoco is a diversified global packaging company serving consumer, industrial, and healthcare end markets, but its investment profile has changed meaningfully following an aggressive strategic pivot toward metal packaging. Through the acquisitions of Ball Metalpack and Eviosys, Sonoco has transformed itself into one of the world’s largest producers of metal food cans, repositioning the business toward a segment characterized by durability, scale advantages, and highly predictable demand. Metal packaging is a mature but exceptionally stable industry, supported by non-discretionary food consumption, high barriers to entry, and rational competition, making it structurally more resilient than many other packaging formats.

This shift materially improves Sonoco’s earnings quality and risk profile. The metal can business benefits from long-term customer relationships with major food producers, where reliability and scale matter more than marginal pricing. Importantly, a large portion of Sonoco’s revenue is governed by multi-year contracts that include price escalation mechanisms tied to raw material costs. This contractual structure provides built-in inflation protection, allowing the company to pass through fluctuations in steel and aluminum prices rather than absorbing margin pressure. As a result, cash flows are more stable and less exposed to commodity volatility than headline inputs might suggest.

Beyond the strategic logic, Sonoco’s capital allocation history reinforces the investment case. The company has paid dividends continuously for nearly a century, underscoring a deeply ingrained commitment to shareholder returns across economic cycles. This record reflects conservative financial management, resilient free cash flow generation, and an owner-oriented culture.

With a stronger portfolio mix tilted toward metal packaging, enhanced inflation pass-through, and a proven willingness to return capital, Sonoco increasingly resembles a defensive compounder rather than a cyclical packaging business. The recent acquisitions, while transformative, align with this long-term identity and strengthen the company’s positioning as a durable, income-generating industrial franchise.

Previously, we covered a bullish thesis on Avery Dennison Corporation by Serhio MaxDividends in May 2025, which highlighted the company’s leadership in materials science, digital identification, earnings growth, and consistent dividend returns. The company’s stock price has appreciated approximately by 2.04% since our coverage. The thesis still stands as fundamentals remain intact. TJ Terwilliger shares a similar view but emphasizes stability from metal packaging.

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Disclosure: None.