ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Packaging of America's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 8.99%.
As of today (2026-06-24), Packaging of America's WACC % is 7.95%. Packaging of America's ROC % is 10.80% (calculated using TTM income statement data).
Packaging of America generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Packaging of America (NYSE:PKG) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Packaging of America's WACC % is 7.95%. Packaging of America's ROC % is 10.80% (calculated using TTM income statement data).
Packaging of America generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Packaging of America (PKG) has a ROC % of 8.99% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Packaging of America and its competitors.
Is Packaging of America's ROC % too high?
Packaging of America's current ROC % is 8.99%. The Packaging & Containers industry median ROC % is 4.16. Packaging of America's value of 8.99% is 116.1% above this industry median. Overall, Packaging of America has a GF Score™ of 88/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Packaging of America's ROC % compare to AMCR and IP?
Packaging of America's ROC % of 8.99% can be compared against companies in the Packaging & Containers industry. The industry median ROC % is 4.16. Packaging of America's value of 8.99% is 116.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Packaging & Containers company?
The median ROC % among Packaging & Containers companies is 4.16, based on 397 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Packaging of America's current ROC % of 8.99% is 116.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Packaging of America and its competitors. For the Packaging & Containers industry, the median ROC % is 4.16 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Packaging of America's current ROC % is 8.99%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Packaging of America stock overvalued right now?
Based on GuruFocus' analysis, Packaging of America (PKG) is currently considered Fairly Valued. The stock's GF Value™ is $221.17, compared to a current price of $237.85 — trading 7.5% above its estimated fair value. The current ROC % is 8.99% and 116.1% above the Packaging & Containers industry median of 4.16. Packaging of America's overall GF Score™ is 88/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Packaging of America (PKG), the current ROC % is 8.99% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Packaging of America (PKG) Overvalued in 2026?
Based on GuruFocus' analysis, Packaging of America stock appears to be overvalued.
The current stock price of $237.85 is trading 7.5% above its estimated GF Value™ of $221.17.
GuruFocus considers Packaging of America to be Fairly Valued.
Key valuation signals for PKG:
ROC %: 8.99%
GF Value™: $221.17 vs. price of $237.85 (7.5% above fair value)
Industry Position: 116.1% above the Packaging & Containers median
No single metric tells the full story. See the PKG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Packaging Corp. of America is the third-largest containerboard and corrugated packaging manufacturer in the United States. It produces over 5 million tons of containerboard annually. The company's share of the domestic containerboard market is roughly 10%. PCA differentiates itself from larger competitors by focusing on smaller customers and operating with a high degree of flexibility.
88GF Score
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