You are here: Home - Investing - Experienced Investor - News -

Stock of the week: Smurfit Kappa

0
Written by: YourMoney.com
03/01/2017
Graham Spooner, investment research analyst at The Share Centre, picks paper packaging company Smurfit Kappa as stock of the week.

Smurfit Kappa engages in the manufacturing, distribution and selling of containerboard, corrugated containers and other paper-based packaging products, such as solid board, graphic board and bag-in-box. The company, which has 370 production sites across 34 countries, found itself promoted to the FTSE 100 in the latest index reshuffle and its recent success rate is unsurprising given that companies involved in the packaging business have generally done well of late as consumer confidence levels have kept up to support the demand for packaged goods.

The company describes itself as one of the world’s leading producers of paper-based packaging and is clearly benefitting from the above as well as an increase in people shopping online. This is demonstrated by its latest results with the group reporting that revenues for the first nine months of 2016 were 1% higher than the previous year at £6.1bn. Smurfit Kappa also reported EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) of £323m, up by 6% over the year based on constant currencies and investors should likewise appreciate that the group reiterated it remains on target to deliver earlier guidance.

Roughly three quarters of the company’s sales are generated in Europe with the rest in the Americas and the group has successfully managed to increase the prices of certain products across all of these regions. Further volume growth is expected across the board and the group’s overall defensive business model could provide some comfort for investors. As a result, we recommend Smurfit Kappa as a ‘buy’ for investors looking for a balanced return and willing to accept a medium level of risk.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
mortgage
Mortgage rates expected to stay down as two-year fixes hit 12-month low

Lenders are likely to keep fixed mortgages at their rock-bottom rates for at least the first quarter of 2017, as...

Close