3 Sustainable Packaging Stocks Wrapping Up Profits
Sustainable packaging stocks are an attractive investment because the industry is growing and advancing at a fast pace.
Sustainable packaging stocks include companies that design and manufacture packaging packaging solutions that are eco-friendly. These companies are involved in the development of packaging solutions. These solutions are either made to be recycled or biodegradable, or even reusable through the use of modern technology.
Technological developments are therefore being used in the sustainable packaging sector in a big way. Technologically advanced concepts like AI in packaging, bio-based packaging materials, and tech-based packaging like QR codes and NFC are also becoming more popular. These technologies increase consumer participation. This is because they are able to get information on the product’s source and sustainability. Also, they increase the effectiveness and tracking of the packaging.
Sustainable packaging stocks could then point to where society is headed toward in the future. Here are three companies that I feel are worth adding to your portfolio.
Ball Corporation (BALL)
Ball Corporation (NYSE:BALL) is a leading supplier of sustainable aluminum packaging solutions.
The company has more than 50 production facilities across the globe. It also supplies the leading brands such as Coca-Cola (NYSE:KO) Heineken with products under long-term agreements.
Apart from its primary aluminum can business, Ball believes that there is much room for the company’s growth. This will be through the application of aluminum packaging to other categories of beverages. These include sparkling water and beer products since plastic bottles and glass containers are still popular. It is also important to note that the company has embraced sustainability, especially in its manufacturing processes. This has enabled it to meet the current consumer trends on eco-friendly packaging.
I think that BALL could be one of those sustainable packaging stocks for investors. Analysts are eying double-digit EPS increases for BALL stock for the foreseeable future.
Amcor plc (AMCR)
Amcor (NYSE:AMCR) is a global leader in responsible packaging solutions. The company’s activities are grouped into two business segments; Flexibles Segment which forms 76% of its consolidated revenues and the Rigid Packaging Segment. Amcor’s production is diverse and its products are used in the beverage, personal care, and home products industries.
Organizations are embracing sustainability and Amcor is not an exception because the company is investing in the decarbonization of its manufacturing processes to meet the needs of the consumers who are increasingly demanding eco-friendly packaging. The firm’s operations are spread across the world with the company’s facilities located in 41 countries. However, the company earns its main revenue from North America and Western Europe.
I like AMCR as one of those sustainable packaging stocks for a few reasons, but the most compelling one is its valuation. It trades at just 14x earnings and only 1.08x times sales. These ratios are significantly below the broader market.
Graphic Packaging (GPK)
Graphic Packaging (NYSE:GPK) looks like an interesting company in the consumer packaging space for a value investor like me. The company is one of the largest producers of fiber-based packaging material and solutions with a focus on paperboard, food, and beverage packaging through its three divisions; Paperboard Mills, Americas Packaging, and Europe Packaging.
Graphic Packaging has also adopted a sound approach to expansion, through acquisitions to gain a wider spread of end markets and geographical presence, especially in Europe. Although the company is suffering from some short-term issues such as volumes and cost pressures, as revealed in its Q1 earnings report, the capital spending on the production facilities will certainly help it to enhance the operating profit and cash flows in the long term.
GPK is one of those sustainable packaging stocks that’s reasonably priced relative to its expected growth rates for its top and bottom lines, trading at just 0.9x sales.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
