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The Recently Recommended Monthly Stock Special
Recently Recommended

The recently recommended company is *Bemis Co. Inc. (BMS)...

Comparison BMS (recently recommended stock of the month) vs SP500 (by Vanguard SP500 Index Fund) in the last 10 years.

Company Information:

Headquartered in Neenah, Wisconsin, Bemis Company, Inc. (BMS) 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 divisions are located in 12 countries and its films for packaging products and adhesive materials are distributed worldwide. Its current total market capitalization of $4.3 billion makes BMS a mid capitalization stock (a mid-cap stock has a total market capitalization between $2 billion and $10 billion) 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%.

 

The value of dividends reinvestment: A hypothetical investment in Bemis Co. 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. A hypothetical investment in the S&P 500® index (thru the Vanguard 500 Index Fund (VFINX) has grown cumulatively (including dividends reinvested) 6,998.71%. 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 (from the chart’s perspective) 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.

 

The actively managed no-load mutual funds American Century Equity Income Investor and Mairs & Power Growth Investor are major shareholders of BMS, holding 3.4% and 3.2% of its shares respectively. The stock is also one of the 63 holdings of the mutual fund managed my Moneypaper Advisors, the MP 63 Fund (DRIPX). BMS’s main competitors are International Paper Co. (IP), Ball Corp. (BLL) and Amcor Ltd ADR (AMCRY).

 

Volatility and risks: BMS’s Beta (a measure of the volatility, or systematic risk in comparison to the market as a whole) is 0.97 compared to the S&P 500® Index, so the stock is 3% less volatile than the Market.

 

Best and worst years during the past 10 years: Its best year was 2009, in which BMS returned, including dividends, +29.0%. On the flip side, its worst year was 2007, when the stock declined 17.0% including 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.

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