Sealed Air Corp/De (NYSE: SEE)

Sector: Consumer Cyclical Industry: Packaging & Containers CIK: 0001012100
Market Cap 6.70 Bn
P/B 3.00
P/E 27.06
P/S 1.55
ROIC (Qtr) 17.39
Div Yield % 1.62
Rev 1y % (Qtr) 0.46
Total Debt (Qtr) 4.27 Bn
Debt/Equity (Qtr) 3.59
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About

Sealed Air Corporation, often referred to as SEE, is a prominent player in the global packaging industry. The company is known for its provision of sustainable, high-performance materials, automation, equipment, and services. Sealed Air's primary aim is to protect goods, extend shelf life, increase food safety, reduce waste, and automate packaging processes. The company operates in two main segments: Food and Protective. The Food segment is responsible for providing integrated packaging materials and automated equipment solutions to enhance food...

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Investment thesis

Bull case

  • Robust free cash flow of 385.90M exceeds capital expenditure of 192.70M by 2x, indicating strong organic growth funding capability.
  • Operating cash flow of 578.60M fully covers other non-current liabilities 319.20M by 1.81x, showing strong long-term stability.
  • Strong free cash flow of 385.90M provides 771.80x coverage of acquisition spending 500000, indicating disciplined M&A strategy.
  • Robust tangible asset base of 3.84B provides 8.66x coverage of working capital 443.70M, indicating strong operational backing.
  • Cash reserves of 282.50M provide ample 565x coverage of acquisition spending 500000, enabling strategic growth opportunities.

Bear case

  • Operating cash flow of 578.60M barely covers its investment activities of (169M), with a coverage ratio of -3.42, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 578.60M provides thin coverage of dividend payments of (118.40M) with a -4.89 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High depreciation of 238.60M relative to operating cash flow of 578.60M, which is 0.41x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 385.90M represents just -1x of debt issuance (384.80M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 1.02B provide limited buffer against comprehensive income items of (930.30M), which is -1.09x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Packaging & Containers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SW Smurfit Westrock plc 25.68 Bn 34.34 0.82 14.11 Bn
2 BALL BALL Corp 24.44 Bn 53.45 3.32 7.21 Bn
3 PKG Packaging Corp Of America 23.43 Bn 162.41 8.65 4.36 Bn
4 AMCR Amcor plc 22.55 Bn 37.83 1.15 16.02 Bn
5 IP International Paper Co /New/ 21.35 Bn 25.41 0.79 12.54 Bn
6 AVY Avery Dennison Corp 17.24 Bn 50.23 2.79 3.78 Bn
7 CCK Crown Holdings, Inc. 14.99 Bn 31.43 1.77 6.60 Bn
8 SEE Sealed Air Corp/De 6.70 Bn 27.06 1.55 4.27 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.08 1.10
EV to Cash from Ops. EV/CFO 13.23 25.51
EV to Debt EV to Debt 1.80 2.87
EV to EBIT EV/EBIT 15.48 21.92
EV to EBITDA EV/EBITDA 11.75 15.97
EV to Free Cash Flow [EV/FCF] EV/FCF 14.86 29.94
EV to Market Cap EV to Market Cap 1.14 1.76
EV to Revenue EV/Rev 1.78 2.08
Price to Book Value [P/B] P/B 3.00 4.77
Price to Earnings [P/E] P/E 27.06 33.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.84 1.61
Dividend Payout Ratio % Div Payout % (Qtr) 25.90 -152.30
Dividend per Basic Share Div per Share (Qtr) 0.80 1.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 30.51 -11.16
Interest Coverage Int. cover (Qtr) 3.28 -4.81
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 12.53 -4.03
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -26.81 347.51
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 21.24
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 8.64 20.83
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -6.47 23.56
EBIT Growth (1y) % EBIT 1y % (Qtr) -0.43 -33.97
EBT Growth (1y) % EBT 1y % (Qtr) 5.17 -493.51
EPS Growth (1y) % EPS 1y % (Qtr) 13.19 36.84
FCF Growth (1y) % FCF 1y % (Qtr) -34.28 -3.88
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.11 14.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.75 0.71
Cash Payout Ratio Cash Payout (Qtr) 0.15 0.20
Cash Ratio Cash Ratio (Qtr) 0.18 0.26
Current Ratio Curr Ratio (Qtr) 1.29 1.51
Debt to Equity Ratio Debt/Equity (Qtr) 3.59 0.90
Interest Cover Ratio Int Coverage (Qtr) 3.28 -4.81
Times Interest Earned Times Interest Earned (Qtr) 3.28 -4.81
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.40 2.80
EBIT Margin % EBIT Margin % (Qtr) 13.94 -2.91
EBT Margin % EBT Margin % (Qtr) 9.69 -5.68
Gross Margin % Gross Margin % (Qtr) 30.10 21.11
Net Profit Margin % Net Margin % (Qtr) 8.50 -6.77