On the surface, Winpak Ltd. (TSX:WPK) may seem like a boring and unattractive investment. I can see why investors might think this way. First of all, the packaging business doesn’t appear very exciting. Winpak manufactures and sells packaging materials as well as products related to its packaging machines, which it also sells. These packaging materials are sold to food and beverage companies and are used in healthcare applications.

The growth rates of the industry are pretty yawn-worthy as well, as the market for packaging has typically grown a mere 2-4% per year.

But, what if we went in for a deeper look beneath the surface?

Long and strong history

Winpak has been in business since 1977 (and has been public since 1986) and has grown through a combination of organic growth and acquisitions. The company has differentiated itself through its proprietary co-extrusion processes and custom resin blends, which is supported by the over $13 million of annual investment in developing new, high-quality materials, and in lowering the cost of manufacturing through the use of advanced technology.

A big market with reliable, steady growth

There is something to be said for reliable, steady growth, and these type of companies surely deserve a place in a well-diversified portfolio.

According to PCI Research, the flexible packaging market can be expected to continue to grow at a pace of 4% annually. In 2015 the total packaging market was US$169 billion. Winpak is not a big player in the market but has shown that it can hold its own versus competitors. The company has been able to consistently grow its business organically and through select acquisitions.

In the last five years the company’s CAGR in revenues was a respectable 6.6%. And the stock has a five-year return of 257%.

Not so boring now, right?

The future is flexible packaging

The company continues to benefit from the trend toward flexible packaging as consumers focus on convenience and companies look for tailored solutions. The growth rate in flexible packaging is the highest in the packaging industry, and it is suited to food and beverage products as well as pharmaceuticals as it provides a high barrier to oxygen, extended shelf life, and convenience.

Returning cash to shareholders

The company made two one-time dividend payments recently. The first was a $1.00 dividend in March 2014, and the second was a $1.50 per share dividend in October 2015.

Lots of cash and no debt

For its part, Winpak has the balance sheet that puts it in a good position to capture growth. Cash on hand at the end of 2015 was US$165 million, an increase of 14% versus 2004, and there was zero debt.

The company will expand organically and introduce new technology and/or take advantage of new product opportunities and, according to management, the investments planned are expected to provide an internal rate of return of over 20%. There is also the possibility of an acquisition given the strong balance sheet.

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Fool contributor Karen Thomas does not own shares of any of the companies listed in this article.