Here's Why Hold Strategy is Apt for Berry Global Stock Right Now

Berry Global Group, Inc. BERY is witnessing solid momentum in the Consumer Packaging North America segment owing to strength in its food, beverage and foodservice end markets. This has led to 10% year-over-year growth in its revenues in first-quarter fiscal 2025 (ended December 2024).Growth in emerging markets and share gains are aiding the company’s Consumer Packaging International segment. The segment’s organic volume increased 1% in the same quarter. The Flexibles segment’s revenues were up 1.8%, driven by continued recovery in the European industrial markets.The company utilizes its cash flow for acquiring businesses, paying out dividends and repurchasing shares. In October 2024, BERY acquired CMG Plastics, a plastics injection molding company that is operated within the Consumer Packaging North America segment. Also, it acquired Pro-Western Plastics in June 2023. The buyout boosted its container business in North America, particularly in the dairy, industrial and medical sectors. The acquired business is operated within the Consumer Packaging North America segment.Regarding rewards to shareholders, Berry Global paid dividends worth $36 million in the first three months of fiscal 2025. In fiscal 2024, it paid dividends of $139 million. The company also repurchased shares worth $120 million in fiscal 2024. In October 2024, Berry Global hiked its dividend by 13% to 31 cents per share (annually: $1.24).BERY’s Price PerformanceImage Source: Zacks Investment ResearchIn the past three months, the Zacks Rank #3 (Hold) company has gained 9.1% against the industry’s 5.1% decline.However, the company has been dealing with escalating operating costs and expenses. In the first quarter of fiscal 2025, its cost of sales increased 1.4% year over year due to rising raw material costs. In the same period, the company’s selling and administrative expenses increased 8.3% year over year. The impact of these costs is evident in the rise of the selling and administrative expenses, as a percentage of total revenues, which climbed 60 basis points to reach 9.4%.Berry Global’s long-term debt in the five fiscal years (2018-2022) witnessed a 9.7% CAGR. Despite its efforts to reduce debt leverage, its current and long-term debt remained high at $7.4 billion at the end of the first quarter of fiscal 2025. Such high debt levels raise concerns for the company.Stocks to ConsiderSome better-ranked companies from the same space are discussed below.RBC Bearings Incorporated RBC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.RBC delivered a trailing four-quarter average earnings surprise of 4.9%. In the past 60 days, the Zacks Consensus Estimate for RBC’s fiscal 2025 earnings has increased 1.2%.Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 5.3%. The Zacks Consensus Estimate for AIT’s fiscal 2025 (ending June 2025) earnings has improved 1.4% in the past 60 days.The Middleby Corporation MIDD presently carries a Zacks Rank of 2. MIDD delivered a trailing four-quarter average earnings surprise of 1.9%. In the past 60 days, the consensus estimate for MIDD’s 2025 earnings has inched up 0.8%.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RBC Bearings Incorporated (RBC): Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report The Middleby Corporation (MIDD): Free Stock Analysis Report Berry Global Group, Inc. (BERY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks