Stockchase Insights Richards Packaging Income Fund RPI.UN-T BUY Aug 19, 2022

RPI.UN is the third largest packaging company in North America.  Although segments of their business have been challenged during the pandemic, the company has been prudently reducing debt through working capital leaving cash reserves in a good position.  Its dividend is maintained by a payout ratio under 50% of free cash flow.   We recommend placing a stop-loss at $29.50, looking to achieve $46.00 -- upside potential of 34%.  Yield 3.8% 

We reiterate RPI.UN, the third largest packaging company in North America, as a TOP PICK.  Management has dealt with industry challenges while continuing to grow cash reserves and retiring debt.  Its dividend is maintained by a payout ratio under 50% of free cash flow.   We recommend trailing up the stop (from $29.50) to $31.00, looking to achieve $46.00 -- upside potential of 33%.  Yield 3.7%

Our PAST TOP PICK with RPI.UN has triggered its stop at $31.  To remain disciplined, we recommend covering the position at this time.  When combined with our previous buy recommendation, this will result in a net investment loss of 10%.