Packaging Corp of America (PKG) stock analysis

P/E above its 5-year median

Packaging Corp of America's P/E of 31.2 is above its own 5-year median of 20.3.

P/E above the industry

Packaging Corp of America's P/E of 31.2 is above the Paper and Allied Products median of 18.7.

EV/EBITDA above its 5-year median

Packaging Corp of America's EV/EBITDA of 13.6 is above its 5-year median of 12.8.

P/B above the industry

Packaging Corp of America's price-to-book of 4.69 is above the Paper and Allied Products median of 1.46.

Trading above fair value

The share price of $253.01 is above our fair value estimate of $169.40.

Margin of safety under 20%

The price is 49.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 2.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -8.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -18.6% over the last twelve months, against a 5-year average of 10.9% a year.

Growing faster than the industry

Revenue grew 12.0% over the last twelve months; the Paper and Allied Products median is 0.8%.

Guidance issued

The latest outlook (third quarter earnings per share, excluding special items, Jul 23, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 20.5% over the last twelve months, against 21.8% a year earlier.

Return on equity over 15%

Return on equity was 15.2% over the last twelve months and averaged 21.8% over five years.

Return on capital over 10%

Return on invested capital was 10.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Packaging Corp of America's return on equity of 15.2% is above the Paper and Allied Products median of 0.3%.

Earnings grew over 5 years

Net income grew 10.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 7.4% over the last twelve months, against a 5-year average of 10.2%.

Net margin above the industry

Packaging Corp of America's net margin of 7.4% is above the Paper and Allied Products median of 0.2%.

High debt

Debt is 82.6% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 76.4% five years ago to 82.6%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 40.9% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.87 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.06; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Packaging Corp of America paid dividends worth 2.2% of the share price over the last twelve months.

Yield below Treasuries

The 2.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Packaging Corp of America yields 2.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 64.6% of net income.

Covered by free cash flow

Dividends take 68.4% of free cash flow.