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Dividend Investors: International Paper Is Boring And Beautiful

Published Fri, 12 Apr 2019 09:45:53 -0400 on Seeking Alpha

International Paper (NYSE: IP) is one of the world's largest fiber-based packaging, pulp, and paper manufacturing businesses. It is the paper-recycling global leader. The company is headquartered in Memphis, TN.

Investment Thesis
International Paper stays out of the limelight, drawing limited attention from Wall Street or Main Street. Yet, this old-school business capitalizes upon some very modern trends: the rise of e-commerce, requiring all manner of cardboard boxes and bulk packaging; and the growth of the Chinese economy, driven by the sheer number of people in its rising middle-class. Indeed, China is short on domestic forests, compounding the country's need for imported material, whether it be recyclables or finished products.
In recent years, management worked hard to reduce the cyclicality of the business. The business model includes planning through the full economic cycle, instead of riding boom-and-busts. By divesting and acquiring certain integrated businesses, ex-CEO John Faraci and his successor, Mark Sutton, have enabled the company to position itself for more stable, sustainable performance during the next downturn. Management seeks to be a low-cost provider, leveraging International Paper's superior global span and scope. Hand-in-hand is a keen emphasis upon operational excellence.
The financials are sound. The company is focused upon delivering strong free cash flow. The current 4.3% dividend yield is strong. The stock appears to be... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PACKAGING CORP OF AMERICA 98.81   12.7 7.79 3.16 3.24


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