Can the DS Smith share price climb even higher?

first_imgCan the DS Smith share price climb even higher? The DS Smith (LSE:SMDS) share price has been on a roll recently. Despite seeing significant declines in the early days of the pandemic, the company’s stock has steadily climbed by more than 25% over the past 12 months. But can it continue its upward trajectory throughout 2021 and beyond? If so, is it too late to add this stock to my portfolio? Image source: Getty Images Looking for new share ideas?Grab this FREE report now.Inside, you discover one FTSE company with a runaway snowball of profits.From 2015-2019…Revenues increased 38.6%.Its net income went up 19.7 times!Since 2012, revenues from regular users have almost DOUBLEDThe opportunity here really is astounding.In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer?You could have the full details on this company right now. Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Our 6 ‘Best Buys Now’ Shares See all posts by Zaven Boyrazian Zaven Boyrazian | Wednesday, 2nd June, 2021 | More on: SMDS center_img One FTSE “Snowball Stock” With Runaway Revenues Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. The rising DS Smith share priceThe 2020 pandemic caused an enormous level of disruption across many industries, especially for brick & mortar retail. Lockdown restrictions prevented non-essential stores from opening their doors to customers throughout last year. Consequently, e-commerce experienced a massive surge in popularity.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…In fact, looking at the overall retail sales statistics for the UK, in May last year, online shopping represented 32.9% of total retail spending. And while there’s been some volatility in this proportion, it had risen to 36% by November – the highest level recorded to date. What does all this have to do with the DS Smith share price?The business is one of the largest cardboard and packaging producers in the world. With e-commerce becoming a more prominent part of the shopping routine, the demand for packaging products from online businesses like Amazon has been rising at an accelerating pace.DS Smith is certainly not the only player within this space. However, after disposing of its plastics division in February last year, the company has moved a step closer to its goal of producing 100% recyclable packaging by 2023. This actually offers the firm a slight competitive advantage that may enable the DS Smith share price to climb even higher over the long term. Let me explain why.In the UK, businesses are charged additional tax based on the volume of packaging products they use. However, the rate charged is dependent on the type and quality of the packaging. In other words, the tax on 100% recyclable materials is much lower than non-recyclable alternatives.Therefore, DS Smith customers will end up saving money as the company becomes more environmentally friendly. Not a bad trait to have when trying to attract additional customers.The potential risks aheadLike most manufacturers, DS Smith is highly susceptible to raw material costs. The price of paper and pulp has been on the rise for the better part of a decade. Recently, it’s experienced a bit of a surge that may begin to derail the firm’s consistent profit growth. After all, as production costs increase, profit margins get squeezed.Furthermore, the balance sheet does carry a significant level of debt. Historically, the interest payments have been comfortably covered by operating income. However, should its profitability suffer, this leverage may threaten its ability to continue paying out a 4% dividend yield to shareholders. Needless to say, any cut to dividends would likely adversely impact the DS Smith share price.The bottom lineThe continued adoption of online shopping is further expanding the available market size in which DS Smith can prosper. And while there are undoubtedly risks involved, this business looks like it can continue delivering its consistent historical growth. Therefore, I think the DS Smith share price can continue to climb higher over the long term. So I’m considering adding some shares to my portfolio. Simply click below to discover how you can take advantage of this. Grab your free report – while it’s online. Zaven Boyrazian does not own shares in DS Smith. The Motley Fool UK has recommended DS Smith. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. But it’s not the only stock I’ve got my eye on this week. Here is:last_img

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