Graphic Packaging raises dividend by 10%

ATLANTA - Graphic Packaging Holding Company (NYSE:GPK), known for its sustainable consumer packaging solutions, has declared a 10% increase in its quarterly dividend. The announcement came today as the company’s Board of Directors approved the dividend hike to $0.11 per share from the previous $0.10. The increase brings the company’s dividend yield to 1.47%, complementing its strong market position with a market capitalization of $8.17 billion. According to InvestingPro data, the company has demonstrated a commitment to shareholder returns through aggressive share buybacks.

This increment in shareholder payout is scheduled for April 5, 2025, with stockholders on record by March 15, 2025, eligible to receive the dividend. The move represents a strategic shift following the near completion of Graphic Packaging’s Vision 2025 transformation program, which is expected to significantly reduce the company’s capital expenditure needs. The company’s financial stability is reflected in its EBITDA of $1.75 billion for the last twelve months, though InvestingPro analysis indicates it operates with a significant debt burden.

President and CEO Michael Doss expressed confidence in the company’s business model and its ability to generate value for shareholders. "As we transition from Vision 2025 to Vision 2030, our focus will be on reinforcing our market dominance in sustainable consumer packaging. We aim to achieve this through reinvestment, strategic mergers and acquisitions, and by enhancing shareholder returns," Doss stated. Trading at a P/E ratio of 11.65, InvestingPro’s Fair Value analysis suggests the stock may be slightly undervalued, with additional insights available in the comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities.

Doss also highlighted the company’s intent to balance dividend growth with share repurchases and to target an investment-grade credit rating when it aligns with shareholder interests. This approach underscores Graphic Packaging’s commitment to prudent capital management and its belief in the enduring strength of its business.

Graphic Packaging specializes in the design and production of packaging made primarily from renewable or recycled materials. The company caters to some of the most prominent brands in the food, beverage, foodservice, household, and other consumer product sectors. With a global network of design and manufacturing facilities, Graphic Packaging is a recognized innovator in reducing the environmental impact of consumer packaging.

This dividend increase is based on a press release statement from Graphic Packaging Holding Company.

In other recent news, Graphic Packaging Holding Company has been in the spotlight due to some significant developments. The company’s stock was downgraded from Buy to Neutral by Citi analysts, who also reduced the price target to $30.00 from the previous $33.00. This adjustment reflects concerns over potential pricing and cost pressures, modest organic volume growth, and a perceived fair valuation of the company’s shares.

Graphic Packaging is expected to release its full-year 2025 guidance during the fourth-quarter earnings report in early February. Citi analysts estimate that the company could announce an EBITDA between $1.60 billion and $1.80 billion, with their projection at $1.735 billion. Additionally, earnings per share (EPS) are expected to range from $2.40 to $2.90, with Citi’s estimate at $2.60.

These projections suggest a mid-single-digit percentage growth in both EBITDA and EPS, taking into account an estimated 1.5% increase in net organic volumes and a net positive impact of $100 million from performance, downtime, and foreign exchange factors. However, these are partially offset by anticipated negative impacts from price and cost dynamics, labor and benefits, and mergers and acquisitions activities.

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