Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTDave Kovaleski, The Motley FoolSat, July 4, 2026 at 9:05 PM GMT+2 4 min readInvestors looking for high-yield dividend stocks typically don't expect them to generate alpha. But in some cases, they do. Take Sonoco Products (NYSE: SON), for example.Sonoco Products is not the oil and gas company, which is spelled differently. Sonoco Products makes packaging -- metal, paper, and plastic packages for consumer and industrial uses.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »It's not a stock many people know, but Sonoco is not only paying an above-average dividend yield; it is also beating the S&P 500 and the Nasdaq.Image source: Getty Images.Sonoco crushes S&P 500 and NasdaqSonoco's stock has posted impressive numbers this year. The stock has returned 30% year to date, beating the Nasdaq's 10.3% and the S&P 500's 8.5%.Further, the stock has a dividend yield of 3.78%, well above the S&P 500 average. It has also boosted its dividend annually for the past 43 consecutive years. If it keeps boosting the payout annually for seven more years, it will be a Dividend King.Sonoco Products is coming off a quarter in which sales dropped 2%, but earnings rose 26% year over year to $0.68 per share. This is largely due to an expense-reduction plan that led to a 4% drop in selling, general, and administrative expenses in the latest quarter.Sonoco's Profitability Performance Plan targets $32 million in savings this year and $150 million to $200 million over the next three years. It is also streamlining operations by selling off some of its lower-performing assets, like ThermoSafe. The expense reductions will offset some of the higher material costs the company is experiencing due to inflation and tariffs.Also, net sales will stall out in fiscal 2026, as the company guides for revenue between $7.25 billion and $7.75 billion, which would be on par with last year at the midpoint. Further, cash flow from operations is anticipated to be between $700 million and $800 million, up slightly from last fiscal year.Sonoco has more room to runSonoco's stock has rallied this year mainly due to its cost-cutting initiative and the pivot to consumer packaging from industrial. Consumer packaging is a higher-margin business and less cyclical than industrial packaging. The company has been steadily increasing consumer sales, and the consumer side now makes up about 67% of its total sales, up from 42% in 2020.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info