Where I live, Wednesday is trash day, but here we have recycling, so the trash cans are divided into four. One for solid waste, one for “containers” like bottles and cans, one for compost (basically grass clippings), and one for paper. The last two are the biggest, but still, somehow the ones for paper are never big enough. Right now everything is being shipped and everything that is being shipped is in boxes. Sure enough, today, no matter how much I folded and stuffed things, I ran out of space in the paper box and a large amount of cardboard ended up lying next to the paper box…That got me thinking.
Packaging Corporation of America (PKG) is an old-fashioned brick-and-mortar industrial business. We manufacture cardboard boxes, cardboard base paper, transportation materials, etc. While it may sound unappealing, like a relic of the past (the company’s origins are over a century old), consider how the world actually works today.
We live in a new era where digital commerce rules. Every click on a mobile app, every online shopping, every supply chain shipment fundamentally relies on one thing: the box. Technology may create order, but old industries package it. Now it’s sitting on the curb and it’s an eyesore.
While stock price growth is relatively modest in 2026, management just increased its annual dividend by 20% to $6.00 per share, and the consensus is that the company will report adjusted EPS of $12.30 next year, or about 18% year-over-year growth. With the stock trading around $225, it’s a solid yield. But in a choppy, sideways macro environment, why just sit there and collect standard payouts? You can use a classic, simple (dare I say “box stock”) buy-write strategy to shore up this old economy horse.
Packaging Corporation of America (PKG) since the beginning of the year.
There is actually a “double distribution” fund. Here is an example of how to achieve a “double dividend”.
The content of the play is as follows.
Stock: Buy shares of Packaging Corp of America (PKG) at the current market price of approximately $225. Option: Sell (write) the July $250 call at the same time. Premium: Target a sale price of $2.25 per contract. Skill level: Beginner
By collecting that $2.25 option premium, you can earn an instant cash yield of about 1% of the stock price in about six weeks.
Let’s think about mathematics here. You acquire the underlying stock and accumulate an additional $2.25 in pure option income for the newly increased $1.50 quarterly dividend payment. If the stock price stays the same or rises slightly, that premium becomes yours and you can effectively double the income this name generates. Buywriting is also a great introductory strategy for those considering options trading for the first time.
If the market catches fire and PKG crosses $250 by the July deadline, you’ll be called out. But guess what? Along with premiums and dividends, we locked in an 11% capital gain from the stock price appreciation. In that case, you can recycle another optional strategy to change the name back.
