Recent Buy – WestRock ( $WRK )

Posted by More Dividends in Dividend Increases On December 18, 2022

WestRock is a company that holds a special place in my heart. This article will be about my recent purchases but it will also bring to light a lot of new information that I was very vague about over the years. I wasn’t being vague for nefarious reasons but to keep my professional life seperate from the life that I have created here on this blog.

I do think that there is a lot of usefull information that I have learned during some of these experiences and I feel that now would be a good time to discuss some of them.

So to start with, I will let it be known that I spent 7 years working at WestRock in the Maintenance and Engineering department. It was an interesting time in life. I worked a lot and I learned a lot. After serving the company for 7 years, I decided to accept a new position with a new company.

While working at WestRock, it allowed me to learn about the company and the paper industry all at the same time. While acquiring all of this knowledge, I decided to take advantage of a benefit that was offered to me since I was an employee of WestRock.

That benefit was an Employee Stock Purchase Plan. If you can remember back, I discussed this in an article that I published called “Should I Participate In An ESPP?”

I decided to use this benefit because they would take the money out of my weekly paycheck and then they would buy stock for me. If I held the stock for the long term, I would also get the added benefit of being a 15% discount when the stock was purchased for me.

This was great because it was allowing me to pay myself by taking the money out of my paycheck before I ever got the paycheck.

Along with having access to an employee stock purchase plan, my time at WestRock actually affected my portfolio in some other ways too.

For instance, I learned about several of the companies that I invested in while working at WestRock. I was using a strategy that I learned from Peter Lynch in his classic book called One Up On Wall Street because I was investing in what I knew.

The companies were Archer Daniels Midland, Emerson Electric and Geniune Parts. I interacted with all of these companies differently but I saw potential in owning all of them because I learned about them while working at WestRock.

As you can see, WestRock has definietly had an impact on my investing career. I am happy about the time that I spent with the commpany. I learned a lot over the years and worked with a great group of guys on solving some challenging problems.

Now that we all know more about my connection with WestRock, let’s dig into the stock and my current position.

WestRock Stock Dividend Data

Current Share Price: $35.07
Current Dividend Yield: 2.92%
Annual Dividend: $1.03
Payout Ratio: 20.88%
Dividend Growth History: 2 years
Earnings Per Share: $6.64
PE Ratio: 9.64

Recap of Information on WestRock

The company was formally formed in 2015 after the merger of Rocktenn and Mead West Vaco. The company operates in the paper industry and owns companies in every step of the process. They own the timber, they manufacture paper, they convert that paper into boxes and displays, then they also have recycling companies so that they can recycle that paper.

The company has done fairly well since it’s inception. The share price steadily climbed over the first several years but in time the price of pulp helped bring the share price back down.

Then when the pandemic set in the company made the tough decision to cut their dividend at a time when the future was very uncertain.

The company currently has a 2 year streak of increasing their dividend. With a current payout ratio around 20%, the company should be able to maintain their dividend if not even grow it during recessionary times in the economy.

To be quite frank, this is what Warren Buffett would refer to as a boring old company. It is a paper company whose complete business history goes back over 100 years. I don’t see them going anywhere anytime soon.

WestRock Impact on More Dividends

I added 20 shares of WestRock. Bringing my new total up to 37.093 shares. Making my new average price per share at $34.90. Currently, the share price is 0.5% higher at $35.07. This addition to my portfolio will add $22.00 to my projected annual dividend income not including the compounding factor. My current position in WestRock contributes $40.80 to my projected annual dividend income. Which will give me a new grand total of $2,423.82.

Conclusion

As you can see, me and WestRock go a long ways back. I think overall that the company will be a great long term investment. I do think that the company can be very cyclical based on commodity pricing but I think that adding to this position with the current state of the markets will still work out good.

I think that the company is pretty well equipped to handle some turbuluent times over a short period of time and it does not appear as though a period of recession may last longer than a year or two.

The company operates in the paper industry which has been around for a very long time. There isn’t going to be any huge innovations but they will be fairly predictable with there earnings.

So for now, I will continue to look for more good buying opporunties to strengthen this position somemore because I think that the company will do very well over a longer term horizon.

Have you recently purchased stock in WestRock? Do you currently own any shares of WestRock? If so I would love to hear about it.

As always I look forward to reading all of your comments and questions, until then….. happy investing!!!

-Jason from MoreDividends.com