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Bemis: A Quality “Package”

Bemis Company has paid dividends to investors since 1922 and has increased its payments for 29 consecutive years.

Image via Neal Jennings/Flickr CC

Our current Featured Stock Special—recommended for long-term investors using dividend reinvestment plans—is Bemis Company (BMS), says Vita Nelson, editor of DirectInvesting.

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 a 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 40 years. The same investment has grown only 2,916.58% during the same period of time, excluding dividends.

The BMS 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.

Vita Nelson is the founding publisher and editor of Moneypaper, and one of the earliest proponents of dividend reinvestment plans.

Subscribe to Vita Nelson’s DirectInvesting here…

About Founded in 1981, MoneyShow is a privately held financial media company headquartered in Sarasota, Florida. As a global network of investing and trading education, MoneyShow presents an extensive agenda of live and online events that attract over 75,000 investors, traders and financial advisors around the world.

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