NYSE:IP

Stock Analysis Report

Executive Summary

International Paper Company operates as a paper and packaging company primarily in North America, Europe, Latin America, North Africa, India, and Russia.

Rewards

Trading at 16.7% below its fair value

Pays a high and reliable dividend of 4.44%

Risk Analysis

Earnings are forecast to decline by an average of -0.5% per year for the next 3 years

Has a high level of debt

Profit margins (6%) are lower than last year (12.2%)



Snowflake Analysis

6 star dividend payer and good value.


Similar Companies

Share Price & News

How has International Paper's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.5%

IP

-0.4%

US Packaging

0.8%

US Market


1 Year Return

4.3%

IP

17.4%

US Packaging

17.8%

US Market

Return vs Industry: IP underperformed the US Packaging industry which returned 17.4% over the past year.

Return vs Market: IP underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

IPIndustryMarket
7 Day0.5%-0.4%0.8%
30 Day0.5%0.2%1.8%
90 Day9.1%3.0%4.1%
1 Year9.2%4.3%20.4%17.4%20.4%17.8%
3 Year-1.8%-12.7%26.3%17.8%45.9%36.4%
5 Year5.0%-13.6%44.2%25.8%68.1%49.6%

Price Volatility Vs. Market

How volatile is International Paper's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is International Paper undervalued compared to its fair value and its price relative to the market?

16.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IP ($46.18) is trading below our estimate of fair value ($55.41)

Significantly Below Fair Value: IP is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: IP is good value based on its PE Ratio (13.3x) compared to the Packaging industry average (18.7x).

PE vs Market: IP is good value based on its PE Ratio (13.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: IP's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: IP is good value based on its PB Ratio (2.4x) compared to the US Packaging industry average (3.5x).


Next Steps

Future Growth

How is International Paper forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

-0.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IP's earnings are forecast to decline over the next 3 years (-0.5% per year).

Earnings vs Market: IP's earnings are forecast to decline over the next 3 years (-0.5% per year).

High Growth Earnings: IP's earnings are forecast to decline over the next 3 years.

Revenue vs Market: IP's revenue is expected to decline over the next 3 years (-1.1% per year).

High Growth Revenue: IP's revenue is forecast to decline over the next 3 years (-1.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IP's Return on Equity is forecast to be low in 3 years time (17.7%).


Next Steps

Past Performance

How has International Paper performed over the past 5 years?

20.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IP has high quality earnings.

Growing Profit Margin: IP's current net profit margins (6%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: IP's earnings have grown significantly by 20.3% per year over the past 5 years.

Accelerating Growth: IP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: IP had negative earnings growth (-51.2%) over the past year, making it difficult to compare to the Packaging industry average (-18.5%).


Return on Equity

High ROE: IP's Return on Equity (18.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is International Paper's financial position?


Financial Position Analysis

Short Term Liabilities: IP's short term assets ($7.1B) exceed its short term liabilities ($4.7B).

Long Term Liabilities: IP's short term assets ($7.1B) do not cover its long term liabilities ($21.7B).


Debt to Equity History and Analysis

Debt Level: IP's debt to equity ratio (137.5%) is considered high.

Reducing Debt: IP's debt to equity ratio has reduced from 139.5% to 137.5% over the past 5 years.

Debt Coverage: IP's debt is well covered by operating cash flow (34.2%).

Interest Coverage: IP's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet

Inventory Level: IP has a high level of physical assets or inventory.

Debt Coverage by Assets: IP's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is International Paper's current dividend yield, its reliability and sustainability?

4.44%

Current Dividend Yield


Dividend Yield vs Market

company4.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Years4.5%

Current dividend yield vs market & industry

Notable Dividend: IP's dividend (4.44%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: IP's dividend (4.44%) is in the top 25% of dividend payers in the US market (3.72%)


Stability and Growth of Payments

Stable Dividend: IP's dividends per share have been stable in the past 10 years.

Growing Dividend: IP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.8%), IP's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IP's dividends in 3 years are forecast to be covered by earnings (55.7% payout ratio).


Next Steps

Management

What is the CEO of International Paper's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Mark Sutton (57yo)

5.1yrs

Tenure

US$21,911,137

Compensation

Mr. Mark Stephan Sutton has been the Chief Executive Officer of International Paper Company, International Paper do Brasil Ltda., and International Paper Italia S.r.l. since November 1, 2014 and Chairman s ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD21.91M) is above average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.8yrs

Average Tenure

56.5yo

Average Age

Experienced Management: IP's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

3.9yrs

Average Tenure

62yo

Average Age

Experienced Board: IP's board of directors are considered experienced (3.9 years average tenure).


Insider Trading

Insider Buying: IP insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$358,60522 Nov 19
William Amick
EntityIndividual
Shares8,000
Max PriceUS$44.83
SellUS$1,909,72812 Sep 19
Timothy Nicholls
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares45,000
Max PriceUS$42.44
SellUS$1,012,16726 Jul 19
Sharon Ryan
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares22,507
Max PriceUS$44.97
SellUS$45,16620 May 19
Thomas Plath
EntityIndividual
Role
Head of Human Resources
Senior Vice President of Human Resources & Global Citizenship
Shares1,000
Max PriceUS$45.17
SellUS$234,27301 May 19
Jean-Michel Ribiéras
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Industrial Packaging the Americas
Shares5,000
Max PriceUS$46.85
SellUS$582,22501 Mar 19
John Sims
EntityIndividual
Role
Head of Corporate Development
Senior Vice President of Corporate Development
Shares12,667
Max PriceUS$45.96
SellUS$433,29127 Feb 19
William Amick
EntityIndividual
Shares9,093
Max PriceUS$47.65
SellUS$429,44925 Feb 19
Gregory Wanta
EntityIndividual
Shares9,000
Max PriceUS$47.72
SellUS$471,52720 Feb 19
Jean-Michel Ribiéras
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Industrial Packaging the Americas
Shares10,000
Max PriceUS$47.15
SellUS$2,100,28114 Feb 19
Timothy Nicholls
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares45,000
Max PriceUS$46.67

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Catherine Slater (55yo)

    Senior Vice President of Global Cellulose Fibers & IP Asia

    • Tenure: 3yrs
    • Compensation: US$4.08m
  • Mark Sutton (57yo)

    Chairman & CEO

    • Tenure: 5.1yrs
    • Compensation: US$21.91m
  • Sharon Ryan (60yo)

    Senior VP

    • Tenure: 8.1yrs
    • Compensation: US$3.69m
  • Tim Nicholls (57yo)

    Senior VP & CFO

    • Tenure: 1.5yrs
    • Compensation: US$5.19m
  • Tommy Joseph (59yo)

    Senior Vice President

    • Tenure: 0.9yrs
    • Compensation: US$4.11m
  • Jean-Michel Ribiéras (56yo)

    Senior Vice President of Industrial Packaging the Americas

    • Tenure: 6.5yrs
    • Compensation: US$3.33m
  • Bob Wenker

    Chief Information Officer & VP

    • Tenure: 0yrs
  • John Sims (56yo)

    Senior Vice President of Corporate Development

    • Tenure: 0.9yrs
  • Tom Plath

    Senior Vice President of Human Resources & Global Citizenship

    • Tenure: 2.8yrs
  • Guillermo Gutierrez (47yo)

    Vice President of Investor Relations

    • Tenure: 2.4yrs

Board Members

  • Steve Whisler (64yo)

    Independent Director

    • Tenure: 12yrs
    • Compensation: US$317.37k
  • Chris Connor (62yo)

    Independent Director

    • Tenure: 2.2yrs
    • Compensation: US$307.40k
  • Ilene Gordon (65yo)

    Independent Presiding Director

    • Tenure: 1.9yrs
    • Compensation: US$324.88k
  • Kathryn Sullivan (67yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$286.21k
  • Ahmet Dördüncü (66yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: US$286.26k
  • Ray Young (57yo)

    Independent Director

    • Tenure: 5.2yrs
    • Compensation: US$322.38k
  • Mark Sutton (57yo)

    Chairman & CEO

    • Tenure: 5.1yrs
    • Compensation: US$21.91m
  • Jacque Hinman (58yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$296.22k
  • Clinton Lewis (52yo)

    Independent Director

    • Tenure: 2.1yrs
    • Compensation: US$297.38k
  • Bill Burns (62yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$297.38k

Company Information

International Paper Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: International Paper Company
  • Ticker: IP
  • Exchange: NYSE
  • Founded: 1898
  • Industry: Paper Packaging
  • Sector: Materials
  • Market Cap: US$18.135b
  • Shares outstanding: 392.12m
  • Website: https://www.internationalpaper.com

Number of Employees


Location

  • International Paper Company
  • 6400 Poplar Avenue
  • Memphis
  • Tennessee
  • 38197
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IPNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
INPDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
IP *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0JCBLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
INPXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
INPETLX (Eurotlx)YesCommon StockITEURJan 1968

Biography

International Paper Company operates as a paper and packaging company primarily in North America, Europe, Latin America, North Africa, India, and Russia. It operates through three segments: Industrial Pack ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 23:37
End of Day Share Price2019/12/11 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.