Headquartered in Wisconsin, Bemis Company (BMS) is a global manufacturer of flexible packaging products and pressure-sensitive materials, notes dividend reinvestment expert Vita Nelson, editor of the industry-leading advisory, DirectInvesting.
Its products range 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.
Its divisions are located in 12 countries and its films for packaging products and adhesive materials are distributed worldwide. Its current total market cap of $4.4 billion makes BMS a mid-capitalization stock. It is considered a solid and well-diversified business with a durable competitive advantage over rivals.
The company also enjoys solid management and corporate culture. According to Yahoo! Finance, consensus estimates call for the company to earn about $2.79 per share this year, up from $2.39 per share last year, and to go to about $3.00 per share next year.
Bemis has paid dividends to investors since 1922 and has increased its payments for 20 consecutive years. During the past five years has increased its dividends at an average rate of 3.6%, and its quarterly payment of $0.31 per share currently provides a yield of 2.54%.
Its current Price to Earnings ratio of 14.7 is 12.3% below the S&P 500® index, and its Price to Sales ratio of 1.2 is 40.8% below the index. According to Morningstar, the stock is trading 17% below its Fair Value Estimate, making it attractive for investors with a long-term investment horizon.
A hypothetical investment in Bemis Company has grown cumulatively (including dividends reinvested) 16,231.52% during the past forty years. The same investment has grown only 7,020.79% in the same period of time, excluding dividends.
During the same period, a hypothetical investment in the S&P 500 index — thru the Vanguard 500 Index Fund (VFINX) — has grown cumulatively (including dividends reinvested) 8,379.72%.
Technically (from the chart’s perspective), the setock also looks attractive, trading 9.4% below its all-time high and 7.3% below its 52 weeks high, while it is forming a long base between $40 and $54, in which $40 is acting as a strong technical support level.
Bemis dividend reinvestment 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 wish to build a holding over the long term.
