Should You Invest in the Packaging Corporation of America?

PHOTO CREDIT: Packaging Corporation of America

OVERVIEW

The Packaging Corporation of America is a company based in the United States. The company designs, manufactures, and distributes packaging materials in the United States and some other markets around the world. The company makes products like cardboard boxes, protective packaging, paper products, and some others. The company was founded in 1867.

Why You Should?

  1. The pandemic has caused a spike in the sales of cardboard boxes due to a boom in e-commerce. This has benefited the company and has helped the company stabilize its sales during this tough economic time. This has also benefited investors in the company.
  2. The company manufactures a wide range of products. This has benefited the company report stable sales even though there is a decline in demand for one of its categories (like paper products for commercial customers during this pandemic). This has helped the company go through tough economic times. This has also benefited investors in the company.
  3. As the demand for e-commerce increases over the next couple of years, the Packaging Corporation of America will continue to see higher demands for cardboard box products and other protective packaging products that the corporation manufactures. This will benefit the company’s long-term growth and will also benefit investors in the company.
  4. Under a Biden administration, there will be many trade deals with our allies. This will end the trade tensions caused by the Trump administration. This will help the company’s international sales and operations and will also reduce some aspects of the operating costs (tariffs) that the company currently faces. This will benefit the company and will also benefit investors in the company.

Why You Should Not?

  1. The Packaging Corporation of America faces tough competition from many other companies in the United States. Some of these companies include International Paper, Georgia-Pacific, and Westrock Company. This competition might hurt the company and might also hurt investors in the company.
  2. Some of the impacts caused by the COVID-19 pandemic have hurt the company’s sales. For example, as offices and schools closed, there was a decline in demand for paper destined to these places. This will only continue to hurt the company in the short to mid-term. This has also hurt investors in the company.

MY OPINION

I think that the Packaging Corporation of America is a good long-term investment due to impacts from the COVID-19 pandemic, a wide range of products in their portfolio, strong e-commerce growth, and the easing of trade tensions. However, tough competition and impacts from the pandemic might hurt the company and investors in the company.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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