Bemis: A Quality "Package"
07/13/2017 2:57 am EST
Headquartered in Neenah, Wisconsin, Bemis is a global manufacturer of flexible packaging products (ranging from self-venting cook-in-bag packaging and retort packaging for shelf-stable products, to vacuum packaging for meat products and puncture-resistant, sterile medical packaging) and pressure-sensitive materials.
Its current total market capitalization of $4.3 billion makes BMS a mid cap stock (mid capitalization) and it is considered a solid and well diversified business with durable competitive advantage over rivals.
The company also enjoys a solid management and corporate culture. According to Yahoo! Finance, consensus estimates call for the company to earn about $2.54 per share this year, up from $2.51 per share last year, and to go to about $2.84 per share next year.
Bemis Company has paid dividends to investors since 1922, and has increased its payments for 29 consecutive years. During the past five years it has increased its dividends at an average rate of 3.8%, with its quarterly payment of $0.30 currently providing a yield of 2.51%.
BMS still has room for significant dividend growth in the coming years, since the company's Dividend Payout Ratio (DPR), which is its dividend payments as a percentage of its earnings, is just 48%.
Its average DPR during the past five years is 52%. Its Price to Earnings ratio (a measure of valuation) of 19.2 is 25.9% below its industry average, its Price to Book ratio of 3.4 is 26.1% below its industry average, its Price to Sales ratio of 1.1 is 8.3% below its industry average and its Debt to Equity ratio of 1.2 is 52.0% below its industry average.
Technically, BMS also looks attractive, trading 14.7% below its all-time high, while it is forming a long price consolidation pattern between $43 and $54 approximately, in which $43 is acting as a strong technical support level.
A hypothetical investment in Bemis has grown cumulatively (including dividends reinvested) 15,059.32% during the past forty years. The same investment has grown only 2,916.58% during the same period of time, excluding dividends.
BMS's dividend re-investment plan charges no fees for cash investing, dividend reinvestment, safekeeping, automatic investment or termination of the plan.
With the stock being fundamental and technically attractive, this company is an appropriate holding for investors who have a long-term investment horizon.