Sonoco SON FAIRLY VALUED Buying Index™ 3 Value Rating

Valuentum Retail Equity Research Ratings as of 1-Aug-2021 Data as of 30-Jul-2021

Buying Index™ 3 Value RatingEconomic Castle

Attractive

Investment ConsiderationsDCF ValuationRelative Valuation

Stock Chart (weekly) ValueCreation™ValueRisk™ValueTrend™Cash Flow GenerationFinancial LeverageGrowthTechnical EvaluationRelative StrengthMoney Flow Index (MFI)Upside/Downside Volume (U/D)Near-term Technical Resistance, 10-wk MADCF = Discounted Cash Flow; MFI, U/D = Please see glossary. MA = Moving Average

Business Quality ValueCreation™

ValueRisk™ Very Poor Poor Good ExcellentCompany Vitals Investment HighlightsMarket Cap (USD) $6,456Avg Weekly Vol (30 wks) 1,95130-week Range (USD) 57.21 - 69.83Valuentum Sector Materials5-week Return -4.1%13-week Return -7.3%30-week Return 6.4%Dividend Yield % 2.8% Firms that generate economic profits with little operating variability score near the top right of the matrix.

Dividends per Share 1.80 Relative Valuation Forward P/E PEG Price / FV

Forward Dividend Payout Ratio 49.9% Air Products & Chemicals 31.8 1.9 115.0%Est. Normal Diluted EPS 3.88 BHP Billiton 21.9 1.9 119.0%P/E on Est. Normal Diluted EPS 16.5 DuPont 19.8 NMF 107.2%Est. Normal EBITDA 837 Sherwin-Williams 30.5 3.0 118.8%Forward EV/EBITDA 9.6 Peer Median 26.2 1.9 116.9%EV/Est. Normal EBITDA 9.1 Sonoco 17.7 2.1 108.1%Forward Revenue Growth (5-yr) 2.4% Price / FV = Current Stock Price divided by Estimated Fair Value

Forward EPS Growth (5-yr) 14.7% Financial Summary ProjectedNMF = Not Meaningful; Est. = Estimated; FY = Fiscal Year

Fiscal Year End: Dec-19 Dec-20 Dec-21

Returns Summary 3-year Historical Average Revenue 5,374 5,237 5,326Return on Equity 15.3% Revenue, YoY% -0.3% -2.5% 1.7%Return on Assets 5.6% Operating Income 527 519 531ROIC, with goodwill 13.6% Operating Margin % 9.8% 9.9% 10.0%ROIC, without goodwill 22.5% Net Income 291 208 365ROIC = Return on Invested Capital; NMF = Not Meaningful Net Income Margin % 5.4% 4.0% 6.9%Leverage, Coverage, and Liquidity Diluted EPS 2.88 2.06 3.61In Millions of USD Diluted EPS, YoY % -7.5% -28.5% 75.4%Total Debt 1,700 Free Cash Flow (CFO-capex) 230 512 285Net Debt 1,135 Free Cash Flow Margin % 4.3% 9.8% 5.4%Total Debt/EBITDA 2.2 In Millions of USD (except for per share items)

Net Debt/EBITDA 1.5 MID-CAPEBITDA/Interest 10.3 POORCurrent Ratio 1.2Quick Ratio 0.9

Visit us at www.valuentum.com

BEARISH

Medium

• Sonoco has paid an amazing 370+ consecutivedividends. There may not be much more meaningfuldividend upside, but increases are expected asearnings expand. Cash paid in M&A could pressuredividend health in the long run. For instance, Sonocobought Can Packaging for ~$49 million in 2020.

• Sonoco faces stringent competition and needs toconstantly adapt to changing industry trends. The firmhas customer concentration risk (its five largestcustomers generate 20%-30% of sales in two of itsfour business segments), and ~80% of its consumerpackaging is for food. 'Base operating margins' havehovered in the high-single-digits in recent past.

----- Actual -----

• Sonoco is focused on profitable growth, expandingmargins by leveraging fixed costs, and driving higherfree cash flow. Its credit is rated investment grade(Baa2/BBB+). Sonoco sold its Europe contractpackaging business in 2020.

The week with the highest trading volume out of the last 30 weeks was a week of heavy selling, or distribution (red bar).

NMF = Not Meaningful

BEARISH

• Packaging customers are consolidating, creating newchallenges for Sonoco. Going forward, packagers willneed greater geographic scale, broader product andtechnology capabilities, and the ability to support trial-to-launch programs across multiple substrates.

66.00

STRONGPOSITIVE

MEDIUM

Structure of the Paper Products IndustryThe paper, packaging and pulp industry remains fragmented, and constituents compete with forest-products firms and companies that provide substitutes for wood and wood-fiber products. The industry relies heavily on raw materials and energy sources, which can pressure margins. Industry participants deal with pricing fluctuations that are driven by swings in capacity utlization and general economic conditions. Growth will largely be driven by emerging-market expansion, as organic paper consumption per person continues to fall due to a secular decline in newsprint. We're not that excited about the group.

Fair Value Range

Sonoco's $115 million Project Horizon aims to upgrade its corrugated medium machine at its Hartsville plant in South Carolina to a state-of-the-art uncoated recycled paperboard facility.

Investment Style Industry $59.00

NEUTRAL

MID-CAP CORE Materials Mining & Chemicals

FAIRLY VALUED

• Sonoco makes industrial and consumer packagingproducts and generates two-thirds of sales in the US.Its business operating segments include 'ConsumerPackaging' (~45% of sales), 'Paper and IndustrialConverted' (~35%), 'Display and Packaging' (~10%)and 'Protective Solutions (~10%).' It was founded in1899 and is headquartered in South Carolina.

EXCELLENTLOW

WEAKNEUTRAL

$47.00 - $71.00 Estimated Fair Value Sector

MODEST

1Very High

The information and data contained in this report is not represented or warranted to be timely, complete, accurate, or correct. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this report, you should consider whether the information is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Low

High

Sonoco SON FAIRLY VALUED

49.00

54.00

59.00

64.00

69.00

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Valuentum Retail Equity Research (10=best) Data as of 30-Jul-2021


Attractive

Economic Profit Analysis

ValueCreation™ EXCELLENT Return on Invested Capital (ROIC)

ROIC - WACC Spread, 3-year historical average 13.7%ROIC - WACC Spread, 5-year projected average 16.6%These spreads equal the firm's annual average ROIC (excluding goodwill) less its WACC.

ValueTrend™ POSITIVE

Weighted Average Cost of Capital (WACC) The graph above shows the firm's ROIC (excluding goodwill) compared with historical averages and its WACC.

ROIC CalculationFiscal Year End: Dec-18 Dec-19 Dec-20

Earnings before InterestOperating Income after Depreciation 478 527 519- Adjusted Taxes (at 20% of EBIT) 96 105 104+ Amortization 0 0 0+ Non-cash Operating Items 39 -105 243- Minority Interest 1 1 0Earnings before Interest 420 316 658

Cost of Equity Invested CapitalRisk Free Rate Assumption Inventories 495 504 451Fundamental Beta (ERP multiplier) + Receivables 848 812 762Estimated Equity Risk Premium + Current Deferred Income Taxes 0 0 0Cost of Equity Assumption + Other Current Assets 56 60 53

+ Property, Plant and Equipment, Net 1,234 1,287 1,244After-tax Cost of Debt + Goodwill, Net (Cost in Excess) 1,309 1,429 1,389Risk Free Rate Assumption + Intangibles 352 388 322Synthetic Credit Spread + Non Current Deferred Income Taxes 47 47 42Cost of Debt Assumption - Accounts Payable 556 538 537Cash Tax Rate Assumption - Other Current Liabilities 332 378 518After-tax Cost of Debt Assumption

Invested Capital, with goodwill 3,453 3,611 3,208Cost of Preferred Stock Invested Capital, without goodwill 2,144 2,182 1,819Preferred DividendsValue of Preferred Stock Return on Invested Capital, with goodwill 12.5% 8.9% 19.3%Cost of Preferred Assumption Return on Invested Capital, without goodwill 20.1% 14.6% 32.9%

In Millions of USD

Weighted Average Cost of Capital (WACC)ERP = Equity Risk Premium

Note: Valuentum may provide an adjusted ROIC measure to better reflect the economic substance of a company's operations, as in the case of companies with negative invested capital.

4.3%3.00%

---------- Actual ----------

0.96.5%

Estimated Fair Value Fair Value Range Investment Style Sector Industry $47.00 - $71.00 MID-CAP CORE

Sonoco receives a ValueTrend™ rating of POSITIVE, which is based on the company'strailing three-year performance. The firm's ROIC (excluding goodwill) increased to32.9% last year from its trailing 3-year average of 22.5%. We expect ROIC (excludinggoodwill) to be in the ballpark of about 26% by the end of our discrete forecast period,with upside potential to about 34% over that time period.

The best measure of a firm's ability to create value for shareholders is expressed bycomparing its return on invested capital (ROIC) with its weighted average cost ofcapital (WACC). The gap or difference between ROIC and WACC is called the firm'seconomic profit spread. Sonoco's 3-year historical return on invested capital (withoutgoodwill) is 22.5%, which is above the estimate of its cost of capital of 8.8%. As such,we assign the firm a ValueCreation™ rating of EXCELLENT. In the chart to the right,we show the probable path of ROIC in the years ahead based on the estimated volatilityof key drivers behind the measure. The solid grey line reflects the most likely outcome,in our opinion, and represents the scenario that results in our fair value estimate.

Materials Mining & Chemicals

5.9%

4.3%

9.8%

$59.00

0

7.3%20.0%

0NA

8.8%



34.0%

25.6%

20.1%

14.6%

32.9%

17.3%

WACC, 8.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

79.2%

20.8%Equity

Debt

Preferred

Capital Structure



Attractive

Growth Analysis

Revenue Growth MODEST Projected Revenue (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

Revenue3-year Historical

CAGR5-year Projected

CAGRSonoco USD 5,237 1.3% 2.4%

Air Products & Chemical USD 8,856 2.6% 9.1%

BHP Billiton USD 42,931 6.3% 12.9%

DuPont USD 20,397 -31.1% -1.6%

Sherwin-Williams USD 18,362 7.0% 5.4%

Peer Median 4.5% 7.3%

Industry Median 1.3% 6.7%

In the chart above, we show our baseline forecast for revenue as well as potential upside and downside cases.

EBITDA Growth Projected EBITDA (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

EBITDA3-year Historical

CAGR5-year Projected

CAGRSonoco USD 774 7.5% 2.5%



DuPont USD 4,755 -23.1% 5.2%




In the chart above, we show our baseline forecast for EBITDA as well as potential upside and downside cases.

Net Income Growth Projected Net Income (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year Net Income

3-year Historical CAGR

5-year Projected CAGR

Sonoco USD 208 5.9% 14.7%

Air Products & Chemical USD 1,901 -14.3% 18.7%


DuPont USD -2,902 -226.4% -199.7%


Peer Median -4.8% 15.9%

Industry Median -3.9% 14.1%

In the chart above, we show our baseline forecast for net income as well as potential upside and downside cases.


$47.00 - $71.00 MID-CAP CORE Materials Mining & Chemicals Estimated Fair Value Fair Value Range Investment Style Sector Industry

$59.00


Sonoco's revenue expansion was less than that of its peer group median but in line withthat of its industry group during the past three years. We expect the firm's pace ofrevenue growth to fall below the median of both its peer group and industry groupduring the next five years. Our growth assessment of each firm is based on the firm's 5-year forward revenue CAGR. Sonoco's future pace of revenue growth is MODEST, inour opinion.

Sonoco's EBITDA expansion has been greater than that of both its peer group andindustry group during the past three years. We expect the firm's pace of EBITDAgrowth to fall below that of both its peer group and industry group during the next fiveyears. Air Products & Chemicals sports the highest expected EBITDA growth rateamong peers.

Sonoco's net income expansion has been greater than that of both its peer group andindustry group during the past three years. We expect the firm's net income to trail itspeer group but outpace that of its industry group during the next five years. BHPBilliton sports the highest expected net income growth rate among peers.

5,391 5,374

5,237

6,132

5,901

5,671

4,600

4,800

5,000

5,200

5,400

5,600

5,800

6,000

6,200

714766 774

976

877

779

0

200

400

600

800

1,000

1,200

314291

208

576

412

249

0

100

200

300

400

500

600

700



Attractive

Cash Flow and Financial Leverage AnalysisCash Flow Generation STRONG Financial Leverage MEDIUM

The bars above show the firms operating cash flow, capital expenditures, and free cash flow, respectively. The bars above show the firm's annual debt-to-EBITDA. The red line shows the firm's normalized measure.

Cash Flow from Operations Projected Operating Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year CFO


5-year Projected CAGR

Sonoco USD 706 26.4% 1.5%


BHP Billiton USD 15,706 -2.2% 19.9%

DuPont USD 4,095 -22.2% 1.1%




In the chart above, we show our baseline forecast for CFO as well as potential upside and downside cases.

Free Cash Flow (CFO-capital expenditures) Projected Free Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year FCF


5-year Projected CAGR Source: Company Filings, Valuentum Projections

Sonoco USD 512 47.2% -4.8%

Air Products & Chemical USD 756 -20.2% 28.6%

BHP Billiton USD 8,066 -12.7% 24.3%

DuPont USD 2,901 -16.6% 3.2%


Peer Median -14.7% 16.7%


In the chart above, we show our baseline forecast for free cash flow as well as potential upside and downside cases.


Sector IndustryInvestment Style

Sonoco's cash flow from operations expansion has been greater than that of both itspeer group and industry group during the past three years. We expect the firm's pace ofcash flow from operations growth to fall below that of both its peer group and industrygroup during the next five years. BHP Billiton sports the highest expected cash flowfrom operations growth rate among peers.

Sonoco's free cash flow expansion has been greater than that of both its peer group andindustry group during the past three years. We expect the firm's pace of free cash flowgrowth to fall below that of both its peer group and industry group during the next fiveyears. Air Products & Chemicals sports the highest expected free cash flow growth rateamong peers.

Fair Value RangeMining & Chemicals $47.00 - $71.00

Firms that exhibit high leverage tend to be more risky than firms with relatively lowdebt loads, all else equal. We measure financial leverage by taking a firm's currenttotal debt load and dividing it by the firm's trailing average 3-year annual EBITDA.Firms that are over 3 for this metric, we rate as having high leverage. Companies thathave less than 1.5 turns of leverage (or a measure below 1.5), we rate as having lowleverage. Sonoco's normalized debt-to-EBITDA measure of about 2.26 puts it in theMEDIUM camp.

Estimated Fair Value $59.00


Firms that generate a free cash flow margin (free cash flow divided by total revenue)above 5% are usually considered cash cows. Sonoco's free cash flow margin hasaveraged about 7.1% during the past 3 years. As such, we think the firm's cash flowgeneration is relatively STRONG. The free cash flow measure shown above is derivedby taking cash flow from operations less capital expenditures and differs fromenterprise free cash flow (FCFF), which we use in deriving our fair value estimate forthe company. For more information on the differences between these two measures,please visit our website at Valuentum.com. At Sonoco, cash flow from operationsincreased about 20% from levels registered two years ago, while capital expendituresexpanded about 1% over the same time period.

MID-CAP CORE Materials

590

426

706

193 196 194

397

230

512

Dec-18 Dec-19 Dec-20

Cash from Operations Capital Expenditures Free Cash Flow Sonoco -normalized

leverage, 2.26

0

0.5

1

1.5

2

2.5

3

3.5

12/31/2018 12/31/2019 12/31/2020

Sonoco- annual leverage Sonoco - normalized leverageMedium Threshold HighThreshold

590

426

706

975

759

543

0

200

400

600

800

1,000

1,200

397

230

512555

400

244

0

100

200

300

400

500

600



Attractive

Valuation Analysis

Valuation Assumptions Valuation BreakdownIn Millions of USD (except for per share items)

Revenue CAGR %Avg. EBIT Margin %Avg. Cash Tax Rate %Earnings Before Interest CAGR %Earnings Per Share CAGR %Free Cash Flow to the Firm CAGR %Earnings before interest = Net operating profits less adjusted taxes

Phase II --> III FCFF CAGR % 3.3% (II) 3% (III)Cost of Equity %After-tax Cost of Debt %Discount Rate (WACC) %Synthetic credit spread = 3%

Phase I Present ValuePhase II Present ValuePhase III Present ValueTotal Firm Value

Net Balance Sheet Impact

Total Equity ValueDiluted Shares OutstandingFair Value per Share

DCF Valuation Summary Enterprise Free Cash FlowFiscal Year End: 12/31/2018 12/31/2019 12/31/2020

420 316 658236 239 255193 196 194

23 -55 -242 - Acquisitions 277 298 49

164 116 912In Millions of USD

Source: Company Filings, Valuentum Projections

Company NameValuentum Buying

Index™Forward Price-to-

Earnings

Price/Earnings-to-Growth (PEG), 5-

yearEV/Est. Normal

EBITDA

5-year Forward Earnings per Share CAGR

3-year Hist Avg ROIC, without

goodwillDividend Yield

%

Stock Price / Fair Value Estimate

Sonoco 3 17.7 2.1 9.1 14.7% 22.5% 2.8% 108.1%

Air Products & Chemical 3 31.8 1.9 11.1 18.0% 15.1% 1.8% 115.0%

BHP Billiton 7 21.9 1.9 9.8 25.9% 14.5% 4.0% 119.0%

DuPont 3 19.8 NMF 8.6 -199.7% 8.2% 1.6% 107.2%

Sherwin-Williams 6 30.5 3.0 17.8 13.2% 37.1% 0.8% 118.8%

Peer Median 4.5 26.2 1.9 10.5 15.6% 14.8% 1.7% 116.9%

Industry Median 5.0 20.8 2.3 10.4 15.5% 15.1% 1.4% 110.6%

Mining & Chemicals

101.2

-12.8%

$59.00

19.5

Company Metrics versus Peer and Industry Medians

18.1

-3.1%

$59.00 $47.00 - $71.00 MID-CAP CORE Materials

20.0%

9.6

+ Depreciation

5.1%

2,434

Long-term Projections

9.8%

14.1

8.8%

In the chart below, we show the build up to our estimate of total enterprise value forSonoco and the break down to the firm's total equity value, which we estimate to beabout 6.01USD billion. The present value of the enterprise free cash flows generatedduring each phase of our model and the net balance sheet impact is displayed. Wedivide total equity value by diluted shares outstanding to arrive at our $59 per sharefair value estimate.

7,144

15.8

12.3

9.0

20.9

5-year Projections

Forward EV/EBITDA

- Change in Working Capital

Enterprise Free Cash Flow (FCFF)

Our future forecasts for key valuation drivers result in a future free enterprise cashflow stream. Above, we show how we calculate enterprise free cash flow and thehistorical performance of the metric for Sonoco. Over the next five years, we expectthe firm's enterprise free cash flow to expand at about a -13% compound annualgrowth rate. During years 6 through 20, we expect the measure to grow at a 3.3%rate. Beyond year 20 (in perpetuity), we grow the firm's free cash flow at inflation(3%).

2.4%10.1%


1,6533,057

View back of report for a full list of industry constituents covered by Valuentum. VBI: Valuentum's ranking for the attractiveness of this investment at the date of the report.

IndustryInvestment Style Sector

- Capital Expenditures

Estimated Fair Value

Results

-1,135

Earnings before Interest

6,009

We think Sonoco is worth $59 per share with a fair value range of $47.00 - $71.00.The margin of safety around our fair value estimate is driven by the firm's LOWValueRisk™ rating, which is derived from an evaluation of the historical volatility ofkey valuation drivers and a future assessment of them. Our near-term operatingforecasts, including revenue and earnings, do not differ much from consensus estimatesor management guidance. Our model reflects a compound annual revenue growth rateof 2.4% during the next five years, a pace that is higher than the firm's 3-year historicalcompound annual growth rate of 1.3%. Our model reflects a 5-year projected averageoperating margin of 10.1%, which is above Sonoco's trailing 3-year average. Beyondyear 5, we assume free cash flow will grow at an annual rate of 3.3% for the next 15years and 3% in perpetuity. For Sonoco, we use a 8.8% weighted average cost of capitalto discount future free cash flows.

In Millions of USD

Fair Value Range


14.7%

---------- Actual ----------

20.9

17.6

25.1

18.4

16.5

P/E on Est. Normal Diluted EPS

12.2

1,653

3,057

2,4341,135

6,009

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Yr 1-5 Yr 6-20 Perpetuity Net Balance SheetImpact

Equity Value



Attractive

Margin of Safety Analysis

Range of Potential Outcomes ValueRisk™ LOW

Revenue Volatility 3.1%Gross Margin Volatility 4.8%Earnings (EBI) Volatility 26.0%Cash Flow (FCFF) Volatility 47.7%Fair Value Range 20.0%The Fair Value Range sets the premium or discount on our estimate of the firm's fair value.

Upside and Downside ProbabilitiesProbability (fair value < $0) Less than 0.1%Probability (fair value > 2x current share price) 0.00%

Future Path of Fair Value

The graph above shows the expected future fair value of the firm's shares relative to its current stock price.

We estimate Sonoco's fair value at this point in time to be about $59 per share. As timepasses, however, companies generate cash flow and pay out cash to shareholders in theform of dividends. The chart to the right compares the firm's current share price withthe path of Sonoco's expected equity value per share over the next three years, assumingour long-term projections prove accurate. The range between the resulting downsidefair value and upside fair value in Year 3 represents our best estimate of the value of thefirm's shares three years hence. This range of potential outcomes is also subject tochange over time, should our views on the firm's future cash flow potential change. Theexpected fair value of $72 per share in Year 3 represents our existing fair value pershare of $59 increased at an annual rate of the firm's cost of equity less its dividendyield. The upside and downside ranges are derived in the same way, but from the upperand lower bounds of our fair value estimate range.

IndustryMining & Chemicals

Sonoco receives a ValueRisk™ rating of LOW based of the historical volatility ofkey drivers of economic value creation. The fair value range sets the margin of safetyaround our fair value estimate of the firm's shares.

Materials


We strive to answer a few questions that investors often ask: 1) What are the chancesof a total loss of investment in this company? and 2) What is the chance that thecompany is really worth twice what I paid for it? The probability (fair value < 0)strives to answer the first question. It indicates the chance that the firm mayencounter insolvency based on the characteristics of its cash flow stream, capitalstructure, and risk profile. The probability (fair value > 2x current share price) strivesto answer the second question. It is our best estimate of whether investors areparticipating in a half-off sale by buying the company's shares at current prices.

Our discounted cash flow process values each firm on the basis of the present value ofall future free cash flows. Although we estimate the firm's fair value at about $59 pershare, every company has a range of probable fair values that's created by theuncertainty of key valuation drivers (like future revenue or earnings, for example). After all, if the future were known with certainty, we wouldn't see much volatility in themarkets as stocks would trade precisely at their known fair values. Our ValueRisk™rating sets the margin of safety or the fair value range we assign to each stock. In thegraph above, we show this probable range of fair values for Sonoco. We think the firmis attractive below $47 per share (the green line), but quite expensive above $71 pershare (the red line). The prices that fall along the yellow line, which includes our fairvalue estimate, represent a reasonable valuation for the firm, in our opinion.


MID-CAP CORE Estimated Fair Value

$59.00 $47.00 - $71.00Sector Fair Value Range Investment Style

$47

$59

$71

0 20 40 60 80 100 120

$87

$72Current Share

Price, $64

$58

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Current Share Price Yr 1 Fair Value Yr 2 Fair Value Yr 3 Fair Value



Attractive

Technical Analysis

Technical Evaluation BEARISH Money Flow Index (MFI) NEUTRAL

30-week Price and Volume Chart (weekly)Relative Price Strength WEAK

5-week Company Performance -4.1%5-week Market Benchmark Performance 2.6%5-week Relative Performance vs. Market Benchmark -6.7%13-week Company Performance -7.3%13-week Market Benchmark Performance 7.5%13-week Relative Performance vs. Market Benchmark -14.8%30-week Company Performance 6.4%30-week Market Benchmark Performance 17.5%30-week Relative Performance vs. Market Benchmark -11.1%

Upside/Downside Volume BEARISH Timeliness Matrix™ Equity Valuation

Relative Strength

Firms that are undervalued and currently showing near-term pricing strength score near the top right of the matrix.

Companies that are undervalued and showing near-term relative price strength couldrepresent timely buys, as the stock may be attractive to both value and momentuminvestors. A cross section of the firm's equity valuation and its relative share pricestrength is shown in the matrix above. We tend to prefer undervalued stocks that have strong pricing momentum, also called Valuentum stocks.

In the chart above, we pinpoint the heaviest accumulation or distribution week of thefirm, determined by the week with the highest trading volume during the past 30 weeks.A heavy accumulation (buying) or distribution (selling) week often determines thefuture near-term direction of the firm's share price, as money managers continue tomove in or out of the stock in the days and weeks ahead driving the stock up or down,respectively. For Sonoco, the week with the highest trading volume out of the last 30weeks was a week of heavy selling, or distribution (red bar). Such market activity couldindicate a reversal of an uptrend or further confirmation of a downtrend.

A firm's relative price strength can be assessed over any number of time horizons. Weshow the firm's performance over the past 5 weeks, 13 weeks, and 30 weeks below.In arriving at our relative strength rating for each company, we assess the past 13weeks, which includes the market's reaction to the firm's most recently reportedquarter, where applicable, and other more recent economic events. During the past 13weeks, Sonoco's shares returned -7.3%, while the market benchmark returned 7.5%.We think Sonoco's 13-week relative price performance is WEAK.

Mining & Chemicals $47.00 - $71.00 MID-CAP CORE MaterialsSector

The level and trend of the Upside/Downside (U/D) volume ratio reveals whetherinstitutional participation has been bullish or bearish as of late. Sonoco's U/D volumeratio of 0.8 is not only less than 1 but also is lower than its trailing average, indicatingBEARISH institutional interest during the past several weeks.


Weak 1Neutral

Estimated Fair Value Fair Value Range

Strong

Overvalued

Industry $59.00

UndervaluedFairly Valued

Investment Style

#VALUE!The firm's near-term moving average (5-week, grey line) and medium-term movingaverage (13-week, red line) are shown in the chart above. Typically, when a shorter-term moving average crosses a medium- or longer-term moving average from below, itrepresents a bullish signal. If the short-term moving average crosses from above, tradersoften view this as bearish. Sonoco's 5-week moving average is below its 13-weekmeasure, indicating a BEARISH trend. We'd grow more constructive on the firm'stechnicals if the firm's 5-week moving average crosses its 13-week moving average.


49

54

59

64

69

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,000

5-week Moving Average

13-week Moving Average

Stock Price

5557596163656769717375

Overbought Line

Oversold Line

86

48

0102030405060708090

100

2.4

0.8

Average, 2.2

0.00.51.01.52.02.53.03.54.04.5

- 10-week Moving Average



Attractive

Pro Forma Income Statement -------------------- Historical --------------------

In Millions of USD (except for per share items)Dec-18 Dec-20

Total Revenue 5,391 5,237

Cost of Goods Sold 4,350 4,191

Selling, General and Administrative Expenses 563 528

Other Operating Expenses 0 (1)

Operating Income 478 519

Unusual items 0 0

Operating Income, including unusual items 478 519

Interest Expense (63) (75)

Other Non-operating Income (25) (183)

Pre-tax Income 390 261

Income Taxes 75 53

Income after tax 315 208

Minority Interest and Equity Income (1) 0

Net Income, excluding extra items 314 208

Income Available to Common, excluding extra items 314 208

Diluted Earnings per Share, excluding extra items 3.11 2.06

Diluted Weighted Shares Outstanding 101.0 101.2

Source: Company Filings, Xignite, Valuentum Projections

Note: Pro forma data in discounted cash-flow valuation may reflect significant adjustments from GAAP accounting data, including cash (not effective) tax rates and other analytical adjustments on a backward-looking and forward-looking basis. No individual data, by itself, found in this report should be used to make any investment decision.

---------- Projected ----------

558

(75)

97

456

0

531

(1)

91

(75)

(1) 0 0

386

Dec-19

4,316

531

0

93

5,401

0

4,302

542

483

292

385

365

Estimated Fair ValueMID-CAP CORE

Sector Industry $59.00 $47.00 - $71.00

291

365

101.2101.2

3.61

101.2


386

Materials Mining & Chemicals

527

5,326

(67)

Dec-21

0

531 558

0

0

365

Dec-22

2.88


386

3.82

Fair Value Range Investment Style

(75)

5,374

(1)

537

4,259

527

291



Attractive

Pro Forma Balance Sheet -------------------- Historical --------------------


AssetsTotal Cash (including marketable securities) 120 565Inventory 495 451Accounts Receivable 848 762Other Current Assets 56 53Total Current Assets 1,519 1,831

Gross Fixed Assets 3,825 4,051(Accumulated Depreciation) (2,591) (2,807)Net Property, Plant, and Equipment 1,234 1,244

Goodwill, Net 1,309 1,389Intangibles, Net 352 322Other Long-term Assets 169 491Total Assets 4,583 5,277

LiabilitiesAccounts Payable 556 537Other Current Liabilities 332 518Current Portion of Long-term Debt 195 456Total Current Liabilities 1,083 1,511

Long-term Debt 1,190 1,244Other Long-term Liabilities 551 622Total Liabilities 2,824 3,377

Preferred Stock 0 0

Shareholders' EquityCommon Stock and Additional Paid in Capital 312 321Retained Earnings 2,188 2,335Other Equity (741) (756)Total Shareholders' Equity 1,759 1,900

Total Liabilities and Shareholders' Equity 4,583 5,277


5,448

---------- Projected ----------

1,285 1,338



5,126 5,709

779 794

2,1691,9611,521

501 491 491

1,429 1,389 1,389388 322 322

812

(3,066) (3,329)1,287

0 0

1,193 1,244 1,244726 622 622

3,323 3,380 3,379

0

318 321 3212,302 2,518 2,720(817) (771) (711)

1,803 2,068 2,330

456 456378 511 504

Dec-21 Dec-22

538 547 553

488

4,352 4,667(2,651)3,938

145

5,709

461

5,448

1,404 1,514 1,513

5,126

504

Mining & Chemicals

Dec-19

Estimated Fair Value Fair Value Range $59.00

Investment StyleMaterials

468

Sector

668 854

60 53 53

$47.00 - $71.00Industry

MID-CAP CORE




Attractive

Pro Forma Cash Flow Statement -------------------- Historical --------------------


Cash from OperationsNet Income 315 208Depreciation and Amortization 236 255Deferred Income Taxes 0 0Operating Gains Or Losses 39 243Changes in Working Capital 0 0

Cash Flow from Operations 590 706

Cash from InvestingPurchase of Property, Plant, Equipment (193) (194)Other Investing Cash Flows (251) 68Cash Flow from Investing (444) (126)

Cash from FinancingIssuance (Retirement) of Stock (15) (8)Issuance (Retirement) of Debt (58) (14)Dividends Paid (161) (173)Other Financing Cash Flows (40) 32Cash Flow from Financing (274) (163)

Foreign Exchange (7) 3

Net Change in Cash (135) 420


(316)

426

0 0 0(105) (15) 60

0 (23) (23)


(184)(182)77

25


103 186

1 0 0

0 0(170) (182) (184)267

(479) (301) (316)

259 263

(10)

---------- Projected ----------

(283) 0 0

(10) 0 0

0 0

586 686

(196) (301)

292 365 386239

Dec-19 Dec-21 Dec-22

Sonoco SON FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector Industry

$59.00 $47.00 - $71.00 MID-CAP CORE Materials Mining & Chemicals



Attractive

Mining & ChemicalsMining & Chemicals FAIRLY VALUED

Company Name TickerMarket Cap (USD-

mil) DCF Valuation ValueCreation™ ValueRisk™ ValueTrend™ Technicals Relative Strength

Air Products & Chemicals APD 64,696 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

Albemarle ALB 22,007 FAIRLY VALUED POOR HIGH NEGATIVE BULLISH STRONG

Alcoa AA 7,468 OVERVALUED POOR HIGH NEGATIVE BULLISH WEAK

AptarGroup ATR 8,593 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL WEAK

BHP Billiton BHP 199,110 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH WEAK

Carlisle Companies CSL 11,123 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Compass Minerals CMP 2,326 FAIRLY VALUED POOR MEDIUM NEGATIVE BULLISH WEAK

DuPont DD 55,199 FAIRLY VALUED POOR LOW POSITIVE BEARISH WEAK

Eastman Chemical EMN 15,386 FAIRLY VALUED GOOD LOW POSITIVE BEARISH WEAK

Ecolab ECL 64,107 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Freeport McMoRan FCX 55,664 FAIRLY VALUED POOR VERY HIGH POSITIVE BEARISH WEAK

Graco GGG 13,430 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH WEAK

H.B. Fuller FUL 3,394 FAIRLY VALUED GOOD LOW POSITIVE BEARISH WEAK

Kaiser Aluminum KALU 1,936 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

LyondellBasell LYB 33,176 FAIRLY VALUED EXCELLENT LOW NEGATIVE BEARISH WEAK

Martin Marietta MLM 22,670 FAIRLY VALUED POOR MEDIUM POSITIVE BULLISH WEAK

Newmont Mining NEM 50,886 FAIRLY VALUED POOR HIGH POSITIVE BEARISH WEAK

Nucor NUE 31,546 FAIRLY VALUED EXCELLENT HIGH POSITIVE VERY BULLISH WEAK

PPG Industries PPG 38,901 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Rio Tinto RIO 140,564 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE VERY BULLISH WEAK

Sherwin-Williams SHW 80,274 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Sonoco SON 6,456 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Vale VALE 107,824 FAIRLY VALUED EXCELLENT VERY HIGH POSITIVE BEARISH WEAK

Vulcan Materials VMC 23,983 FAIRLY VALUED GOOD MEDIUM POSITIVE VERY BULLISH WEAK

Wheaton Precious Metals WPM 20,771 FAIRLY VALUED POOR MEDIUM POSITIVE VERY BULLISH WEAK

UNATTRACTIVE

NEUTRAL

NEUTRAL

NEUTRAL

UNATTRACTIVE

MID-CAP CORE

LARGE-CAP VALUE

LARGE-CAP CORE

LARGE-CAP GROWTH UNATTRACTIVE

LARGE-CAP CORE

MID-CAP CORE

LARGE-CAP CORE

LARGE-CAP CORE

LARGE-CAP CORE

ATTRACTIVE

LARGE-CAP CORE


MID-CAP CORE

SMALL-CAP GROWTH

LARGE-CAP CORE

LARGE-CAP CORE

NEUTRAL

NEUTRAL

ATTRACTIVE

ATTRACTIVE

UNATTRACTIVE

NEUTRAL

NEUTRAL

ATTRACTIVE

The above bar chart reveals the price/fair value of the company, its peers, and the industry as a whole.

We think the Mining & Chemicals industry is fairly valued at this time. The industry'smarket cap is trading between 80% and 120% of our estimate of its fair value based onour DCF process. Although we use a firm-specific ValueRisk™ measure to determinewhether a firm is undervalued or overvalued based on our DCF process, we consider anindustry to be undervalued if it is trading below 80% of our estimate of its fair valueand overvalued if it is trading at over 120% of our estimate of its fair value. We thinkthese fair value ranges are appropriate given the diversification benefits of holding abasket of stocks. Although there may be individual opportunities within the Mining &Chemicals industry, we don't find the industry as a whole attractive based solely onvaluation.

Shaded blue denotes that the firm has earned the highest rating for that respective category.Investment Style

LARGE-CAP GROWTH

LARGE-CAP GROWTH

MID-CAP CORE

MID-CAP VALUE

LARGE-CAP GROWTH

$59.00 $47.00 - $71.00 MID-CAP CORE Materials Mining & Chemicals

Relative Valuation

NEUTRAL

UNATTRACTIVE

NEUTRAL

NEUTRAL

ATTRACTIVE

ATTRACTIVE

UNATTRACTIVE

NEUTRAL

ATTRACTIVE

UNATTRACTIVE

LARGE-CAP GROWTH

LARGE-CAP CORE

LARGE-CAP GROWTH

LARGE-CAP VALUE

LARGE-CAP GROWTH

LARGE-CAP CORE

Estimated Fair Value Fair Value Range Investment Style Sector Industry


108.1%

116.9%

110.6%

102%

104%

106%

108%

110%

112%

114%

116%

118%

Sonoco Peer Median Mining & Chemicals

Valuentum's Full Page Stock Report


BA

G

I

N

C

J

D

M

H

E

L

K

A DCF ValuationShows whether the firm is undervalued, fairly valued, or overvalued based on our DCF process and by how much.

B Valuentum Buying Index (VBI)Provides insight into the timeliness of an investment opportunity. We rank firms from 1 to 10 based on rigorous fiancial, valuation, and technical analysis. A 10 represents one of our top picks.

C Valuentum Value Rating (VVR) Indicates whether we think a firm is undervalued, fairly valued, or overvalued on the basis of our DCF process.

D Investment ConsiderationsEvaluates firms on 12 different measures, from the firm's growth and cash flow generation to the stock's money flow index and upside/downside volume. We reveal technical support and resistance levels.

E 30-week Price and Volume ActionDisplays the last accumulation or distribution week of the stock and historical price and volume action.

G Company VitalsShows sector,industry and other relevant company information.

H Business QualitySummary of the firm's ability to create value for shareholders compared wth the underlying risk of its operations.

I Normalized EPS and EBITDAEstimation of the firm's normalized earnings measures and the corresponding valuation mutliples.

J Investment HighlightsOur opinion of the company, including analysis of its financial and technical strengths and weaknesses.

K Relative ValuationComparison of the firm's PE, PEG, and Price/FV ratios versus peers.

L Returns Summary3-year averages of the firm's key return measures, including return on invested capital, with and without goodwill.

M Leverage, Coverage, and LiquidityA snapshot of the company's financial health.

N Financial SummaryA summary of the proforma financial statements found in the extended report.

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

UNDERVALUED

FAIRLY VALUED

OVERVALUED

• Revenue Volatility • Margin Volatility • Earnings Volatility • Cash Flow Volatility

The firm's stock price is compared to the suggested margin of safety. If a firm's stock price falls below the lower bound of our estimated fair value range, it receives Valuentum's highest Value Rating.The volatility of key valuation drivers are estimated and a margin of safety is determined.

@Valuentum, we strive to stand out from the crowd. Mostinvestment research publishers fall into a few camps,whether it be value, growth, income, momentum, chartistor some variant of the aforementioned. We think each inits own right holds merit, but we think the combination ofthese approaches can be even more powerful. After all,stock price movements aren’t just driven by investors ofthe value or growth variety, but by all market participants.Therefore, we look at stocks from a variety of investmentperspectives in order to better understand and identifyideas. We want to provide relevant information.

The core of our process is grounded in rigorous discountedcash flow analysis and incorporates the concept of amargin of safety. We offer a fair value estimate for eachcompany and provide a relative valuation assessment inthe context of a company’s industry and closest peers. Across section of our ValueCreation™ and ValueRisk™ratings provides a financial assessment of a company’sbusiness quality, while our ValueTrend™ rating offersinsight into the trajectory of a firm’s economic profitcreation. The Economic Castle rating measures themagnitude of future economic value generation, and theDividend Cushion ratio assesses the financial capacity of acompany to keep raising its dividend.

A complete three-stage free cash flow to the firm valuation model generates an estimate of the firm's equity value per share based on estimated future free cash flows.

About Valuentum

Our analysis doesn’t stop there. We also offer a technicalevaluation of the stock as well as other momentumindicators. We not only want to reveal to readers whichfirms may be undervalued, in our view, but we also wantto provide readers with information to help them assessentry and exit points. Most research publishers focus onarriving at a target price or fair value estimate, but mayfall short of providing a technical assessment to bolsterbuy and sell disciplines. We strive to go the distance andprovide readers with answers--not half the story.

An explanation of our approach would not be complete ifwe didn’t describe our ideal stock idea. We’re lookingfor companies that are undervalued--both on a DCF basisand versus peers--have strong growth potential, have asolid track record of creating economic profits forshareholders with reasonable risk, are strong cash flowgenerators, have manageable financial leverage, and arecurrently showing bullish technical and momentumindicators. For dividend growth ideas, we look forcompanies that have both the capacity and willingness tokeep raising the dividend.

Can such stock ideas exist? Subscribe to Valuentum toreceive our best investment ideas and analysis onhundreds of stocks, dividends, ETFs and more.

Full annual forecasts of income statement, balance sheet, and cash flow statement items. Firm-specific cost of equity, cost of debt, weighted average cost of capital, and long-term growth and profitability measures estimated.The information and data contained in this report is not represented or warranted to be timely, complete, accurate, or correct. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this report, you should consider whether the information is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Historical firm-specific financial data generates our ValueCreation™, ValueRisk™, and ValueTrend™ ratings. The data provides the basis for our financial forecasts.

Financial Forecasts

Financial Statement Analysis

Discounted Cash Flow Valuation

ModelValueRisk™

Rating

Valuentum Value Rating (VVR)

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

@ Valuentum, we like to look at companies from anumber of different perspectives. The Valuentum BuyingIndex (VBI) combines rigorous financial and valuationanalysis with an evaluation of a stock's technicals to derivea rating between 1 and 10 for each company. The VBIplaces considerable emphasis on a company's discountedcash-flow (DCF) valuation, its relative valuation versuspeers (both forward PE and PEG ratios), and its technicalsin order to help readers assess entry and exit points on themost interesting ideas.

Let's follow the red line on the flow chart below to seehow a company can score a 10, the best mark on the index(a "Top Pick"). First, the company would need to be'undervalued' on a DCF basis and 'attractive' on a relativevalue basis. The stock would also have to be exhibiting

Methodology for Picking Stocks - Valuentum Buying Index™ (VBI)

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

'bullish' technicals. The firm would need aValueCreation™ rating of 'good' or 'excellent', exhibit'high' or 'aggressive' growth prospects, and generate atleast a 'medium' or 'neutral' assessment for cash flowgeneration, financial leverage, and relative price strength.

This is a tall order for any company. Stocks that don'tmake the cut for a 10 are ranked accordingly, with theleast attractive stocks, in our opinion, garnering a ratingof 1 ("We'd sell"). Most of our coverage universeregisters ratings between 3 and 7, but at any given timethere could be large number of companies garneringeither very high or very low scores, especially at marketlows or tops, respectively.

The Best Ideas Newsletter portfolio puts the VBI intopractice.

DCF FairlyValued

DCF Undervalued

Relative ValueUnattractive/Neutral

Relative Value Attractive

Relative ValueUnattractive/Neutral


Technicals Bearish: 1

Technicals Neutral: 2

TechnicalsBullish: 4

Technicals Bullish: 7

TechnicalsBearish: 6

Technicals >= BullishValueCreation(TM) >= GoodGrowth >= HighCash Flow Generation >= MediumFinancial Leverage <= MediumRelative Strength >= Neutral

Final Score: 10



TechnicalsBearish: 3

Relative Value Unattractive/Neutral











Initial Index Score

DCF Overvalued

Relative Value. We compare the firm's forward price-to earnings (PE) ratio and itsprice/earnings-to-growth (PEG) ratio to that of its peers. If both measures fall below thepeer median, the firm receives an ATTRACTIVE rating. If both are above the peermedian, the firm receives an UNATTRACTIVE rating. Any other combination resultsin a NEUTRAL rating.

Cash Flow Generation. Firms' cash flow generation capacity are measured along thescale of STRONG, MEDIUM, and WEAK. A firm with a 3-year historical free cashflow margin (free cash flow divided by sales) greater than 5% receives a STRONGrating, while firms earning less than 1% of sales as free cash flow receive a WEAKrating.

Financial Leverage. Based on the firm's normalized debt-to-EBITDA metric, we rank firms on the following scale: LOW, MEDIUM, and HIGH. Companies with a normalized debt-to-EBITDA ratio below 1.5 receive a LOW score, while those with a measure above 3 receive a HIGH score.

Timeliness Matrix. We compare the company's recent stock performance relative tothe market benchmark with our assessment of its valuation. Firms that areexperiencing near-term stock price outperformance and are undervalued by ourestimate may represent timely buys.

Stock Price Relative Strength. We assess the perfomance of the company's stockduring the past quarter, 13 weeks, relative to an ETF that mirrors the aggregateperformance of constituents of the stock market. Firms are measured along the scaleof STRONG, NEUTRAL, and WEAK. Companies that have outperformed themarket index by more than 2.5% during this 13-week period receive a STRONGrating, while firms that trailed the market index by more than 2.5% during this 13-week period receive a WEAK rating.

Glossary

Technical Evaluation. We evaluate a firm's near-term and medium-term movingaverages and money flow index (MFI) to assign each firm a rating along thefollowing scale: VERY BULLISH, BULLISH, NEUTRAL, BEARISH, and VERYBEARISH.

DCF Valuation. We opine on the firm's valuation based on our DCF process. Firmsthat are trading with an appropriate discount to our fair value estimate receive anUNDERVALUED rating. Firms that are trading within our fair value range receive aFAIRLY VALUED rating, while firms that are trading above the upper bound of ourfair value range receive an OVERVALUED rating.

Investment Style. Valuentum uses its own proprietary stock-classification system.Nano-cap: Less than $50 million; Micro-cap: Between $50 million and $200 million;Small-cap: Between $200 million and $2 billion; Mid-cap: Between $2 billion and$10 billion; Large-cap: Between $10 billion and $200 billion; Mega-cap: Over $200billion. Blend: Firm's that we think are undervalued and exhibit high growthprospects (growth in excess of three times the rate of assumed inflation). Value:Firm's that we believe are undervalued, but do not exhibit high growth prospects.Growth: Firms that are not undervalued, in our opinion, but exhibit high growthprospects. Core: Firms that are neither undervalued nor exhibit high growthprospects.

Company Vitals. In this section, we list key financial information and the sector andindustry that Valuentum assigns to the stock. The P/E-Growth (5-yr), or PEG ratio,divides the current share price by last year's earnings (EPS) and then divides thatquotient by our estimate of the firm's 5-year EPS growth rate. The estimatednormalized diluted EPS and estimated normalized EBITDA represent the five-yearforward average of these measures used in our discounted cash flow model. The P/Eon estimated normalized EPS divides the current share price by estimated normalizeddiluted EPS. The EV/estimated normalized EBITDA considers the current enterprisevalue of the company and divides it by estimated normalized EBITDA. EV is definedas the firm's market capitalization plus total debt, minority interest, preferred stockless cash and cash equivalents.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Estimated Fair Value. This measure is our opinion of the fair equity value per share ofthe company. If our forecasts prove accurate, which may not always be the case, wemay expect a firm's stock price to converge to this value within the next 3 years.

Fair Value Range. The fair value range represents an upper bound and lower bound,between which we would consider the firm to be fairly valued. The range considers ourestimate of the firm's fair value and the margin of safety suggested by the volatility ofkey valuation drivers, including revenue, gross margin, earnings before interest, andenterprise free cash flow (the determinants behind our ValueRisk™ rating).

ValueCreation™. This is a proprietary Valuentum measure. ValueCreation™indicates the firm's historical track record in creating economic value for shareholders,taking the average difference between ROIC (without goodwill) and the firm'sestimated WACC during the past three years. The firm's performance is measured alongthe scale of EXCELLENT, GOOD, POOR, and VERY POOR. Those firms withEXCELLENT ratings have a demonstrated track record of creating economic value,while those that register a VERY POOR mark have been destroying economic value.

ValueRisk™. This is a proprietary Valuentum measure. ValueRisk™ indicates thehistorical volatility of key valuation drivers, including revenue, gross margin, earningsbefore interest, and enterprise free cash flow. The standard deviation of each measure iscalculated and scaled against last year's measure to arrive at a percentage deviation foreach item. These percentage deviations are weighted equally to arrive at thecorresponding fair value range for each stock, measured in percentage terms. The firm'sperformance is measured along the scale of LOW, MEDIUM, HIGH, and VERY HIGH.The ValueRisk™ rating for each firm also determines the fundamental beta of eachfirm along the following scale: LOW (0.85), MEDIUM (1), HIGH (1.15), VERY HIGH(1.3).

ValueTrend™. This is a proprietary Valuentum measure. ValueTrend™ indicates thetrajectory of the firm's return on invested capital (ROIC). Firms that earned an ROIClast year that was greater than the 3-year average of the measure earn a POSITIVErating. Firms that earned an ROIC last year that was less than the 3-year average of themeasure earn a NEGATIVE rating.

Business Quality Matrix. We compare the firm's ValueCreation™ and ValueRisk™ratings. The box is an easy way for investors to quickly assess the business quality ofa company. Firms that generate economic profits with little operating variabilityscore near the top right of the matrix.

Return on Invested Capital. At Valuentum, we place considerable emphasis onreturn on invested capital (both with and without goodwill). The measure focuses onthe return (earnings) the company is generating on its operating assets and is superiorto return on equity and return on assets, which can be skewed by a firm's leverage orexcess cash balance, respectively.

Range of Potential Outcomes. The firm's margin of safety is shown in the graphicof a normal distribution. We consider a firm to be undervalued if its stock price fallsalong the green line and overvalued if the stock price falls along the red line. Weconsider the firm to be fairly valued if its stock price falls along the yellow line.

Money Flow Index (MFI). The MFI is a technical indicator that measures buyingand selling pressure based on both price and volume. Traders typically use thismeasure to identify potential reversals with overbought and oversold levels. We use a14-week measure to rank firms along the following scale: EXTREMELYOVERBOUGHT (>90), OVERBOUGHT (80-90), NEUTRAL (20-80), OVERSOLD(10-20), EXTREMELY OVERSOLD (0-10).

Upside/Downside Volume. Heavy volume on up days and lower volume on down days suggests that institutions are heavily participating in a stock's upward advance. We use the trailing 14-week average of upside and downside volume to calculate an informative ratio. We rank each firm's U/D volume ratio along the following scale: BULLISH, IMPROVING, DETERIORATING, and BEARISH.

SON Rating History Price Fair Value VBI30-Jul-21 $63.79 $59.00 323-Dec-20 $59.51 $57.00 711-Feb-19 $60.77 $52.00 610-Sep-18 $57.36 $50.00 527-Apr-18 $52.04 $46.00 75-Jan-18 $54.02 $46.00 78-Sep-17 $48.70 $42.00 312-May-17 $50.69 $44.00 36-Jan-17 $54.00 $46.00 622-Jul-16 $51.45 $43.00 626-Feb-16 $43.47 $39.00 618-Sep-15 $39.54 $39.00 324-Apr-15 $44.79 $40.00 33-Oct-14 $39.41 $41.00 4

The High Yield Dividend Newsletter portfolio, the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Any performance, including that in the Nelson Exclusive publication, is hypothetical and does not represent actual trading. Past performance is not a guarantee of future results.

Valuentum is an investment research publishing company.

Valuentum has not owned and does not own any shares of stocks mentioned on its website or in this report. President of Investment Research Brian Nelson does not own any shares of stocks mentioned on Valuentum's website or in this report. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account.

If an independent contributor or employee mentions a stock he or she owns, we disclose it in the article/report that mentions the security. Please view individual articles on Valuentum's website for additional disclosures. Contact us to learn more about Valuentum's editorial policies.

Copyright (c) 2017 by Valuentum, Inc. All rights reserved.No part of this publication may be reproduced in any form or by any means.The information contained in this report is not represented or warranted to be accurate, correct,complete, or timely. This report is for informational purposes only and should not be considered asolicitation to buy or sell any security. No warranty or guarantee may be created or extended bysales or promotional materials, whether by email or in any other format. The securities or strategiesmentioned herein may not be suitable for all types of investors. The information contained in thisreport does not constitute any advice, especially on the tax consequences of making any particularinvestment decision. This material is not intended for any specific type of investor and does nottake into account an investor's particular investment objectives, financial situation or needs. Thisreport is not intended as a recommendation of the security highlighted or any particular investmentstrategy. Before acting on any information found in this report, readers should consider whethersuch an investment is suitable for their particular circumstances, perform their own due-diligence,and if necessary, seek professional advice. The sources of the data used in this report are believed by Valuentum to be reliable, but the data’saccuracy, completeness or interpretation cannot be guaranteed. Assumptions, opinions, andestimates are based on our judgment as of the date of the report and are subject to change withoutnotice. Valuentum is not responsible for any errors or omissions or for results obtained from the useof this report and accepts no liability for how readers may choose to utilize the content. In no eventshall Valuentum be liable to any party for any direct, indirect, incidental, exemplary, compensatory,punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, withoutlimitation, lost income or lost profits and opportunity costs) in connection with any use of theinformation contained in this document. Investors should consider this report as only a single factorin making their investment decision. Valuentum is not a money manager, is not a registered investment advisor, and does not offerbrokerage or investment banking services. Valuentum has not received any compensation from thecompany or companies highlighted in this report. Valuentum, its employees, independentcontractors and affiliates may have long, short or derivative positions in the securities mentionedherein. Information and data in Valuentum’s valuation models and analysis may not capture allsubjective, qualitative influences such as changes in management, business and political trends, orlegal and regulatory developments. Redistribution is prohibited without written permission. Readersshould be aware that information in this work may have changed between when this work waswritten or created and when it is read. There is risk of substantial loss associated with investing infinancial instruments. Valuentum's company-specific forecasts used in its discounted cash flow model are rules-based.These rules reflect the experience and opinions of Valuentum's analyst team. Historical data used inour valuation model is provided by Xignite and from other publicly available sources includingannual and quarterly regulatory filings. Stock price and volume data is provided by Xignite. Nowarranty is made regarding the accuracy of any data or any opinions. Valuentum's valuation modelis based on sound academic principles, and other forecasts in the model such as inflation and theequity risk premium are based on long-term averages. The Valuentum proprietary automated text-generation system creates text that will vary by company and may often change for the samecompany upon subsequent updates. Valuentum uses its own proprietary stock investment style and industry classification systems. Peercompanies are selected based on the opinions of the Valuentum analyst team. Research reports anddata are updated periodically, though Valuentum assumes no obligation to update its reports,opinions, or data following publication in any form or format. Performance assessment ofValuentum metrics, including the Valuentum Buying Index, is ongoing, and we intend to updateinvestors periodically, though Valuentum assumes no obligation to do so. Not all information isavailable on all companies. There may be a lag before reports and data are updated for stock splitsand stock dividends. Past simulated performance, whether backtested or walk-forward or other, is not a guarantee offuture results. For general information about Valuentum's products and services, please contact usat [email protected] or visit our website at www.valuentum.com.

To send us feedback or if you have any questions, please contact us at [email protected]. We're always looking for ways to better serve your investment needs and improve our research.

Disclosures, Disclaimers & Additional Sources

Sonoco SON FAIRLY VALUED Buying Index™ 3 Value Rating

Documents

Transcript of Sonoco SON FAIRLY VALUED Buying Index™ 3 Value Rating