Income investors will find a lot to like about Sonoco Products Co. (SON), an undervalued, high-dividend stock with a recent yield of around 5%. Sonoco Products provides packaging, industrial products, and supply chain services to its customers, explains Bob Ciura, contributing editor at Sure Dividend.
The company’s products are used in industries like appliances, electronics, beverage, construction, and food. The company generates more than $5 billion in annual sales.
On Oct. 22, 2025, Sonoco Products reported third-quarter results. For the quarter, revenue grew 57.8% to $2.13 billion, though this was $20 million below expectations. Adjusted earnings per share of $1.92 compared to $1.49 in the prior year, $0.01 below estimates. Revenue and earnings once again benefited from the addition of Eviosys.
For the quarter, Consumer Packaging revenues were up 117% to $1.44 billion, mostly due to contributions from Eviosys. Results were also aided by price increases that were implemented to offset tariffs and currency exchange rates. Industrial Paper Packing sales were unchanged at $585 million, as price increases were offset by weaker volume following two plant divestitures in China last year.
With an annualized dividend payout of $2.12 per share, the dividend is well-covered, with room for continued increases. The company’s future growth will come organically, as well as from acquisitions. On Sept. 7, 2025, the company announced that it had agreed to sell its ThermoSafe business unit to Arsenal Capital Partners for $725 million.
The company has grown EPS at a rate of 7.7% since 2015. We maintain our expected growth rate of 5% over the next five years. A key competitive advantage for Sonoco Products is that the company is usually able to pass along rising raw material and transportation costs to its customers.
The stock is also undervalued, with a price-to-earnings ratio of approximately 7.5, which is well below our fair value multiple of 12. It is also a strong dividend-growth stock. Sonoco Products has increased its dividend for 49 consecutive years.
Recommended Action: Buy SON.
