Where does International Paper rank after its 5% announced dividend increase?

ip

International Paper Company (IP) announced a regular quarterly dividend of $0.4625, a 10 percent increase from the prior rate of $0.44 per share. The dividend will be paid at the new higher rate on December 15, 2016, to shareholders of record at close of business on November 15, 2016. International Paper Co. is currently priced at $45.72.

Listed in the table below are the quarterly dividend payments since 2010. Our analysis of International Paper Co. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
11/15/2016 0.4625
8/11/2016 0.44
5/25/2016 0.44
2/11/2016 0.44
11/12/2015 0.44
8/12/2015 0.4
5/21/2015 0.4
2/11/2015 0.4
11/13/2014 0.4
8/13/2014 0.35
5/21/2014 0.345
2/12/2014 0.345
11/13/2013 0.345
8/13/2013 0.296
5/22/2013 0.296
2/13/2013 0.296
11/13/2012 0.296
8/13/2012 0.259
5/22/2012 0.259
2/13/2012 0.259
11/14/2011 0.259
8/11/2011 0.259
5/13/2011 0.259
2/11/2011 0.185
11/12/2010 0.123
8/12/2010 0.123
5/13/2010 0.123
2/11/2010 0.025

Analysis of International Paper Co. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 3.76% 75
Dividend Growth (3-6 year avg) 23.8% 62
Forward P/E 12.1 52
S&P Financial Rating B+ 200
Beta 1.15 175
Total Score   564

Additional Information;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr lowest Yield %
3.76% 12.5% 35% 53.0 0.86 .23 0.99 4.99% 2.40%

Final Analysis;

  • International Paper’s dividend yield is above the average of the S&P 500 Index and is trading at its average historical dividend yield.
  • International Paper maintains a 3 year dividend growth rate of 12.5%.
  • International Paper has paid out a dividend consecutively for the past 21 years.
  • International Paper is trading at a modest forward P/E ratio but at an elevated price/sales (P/S) ratio.  From a relative valuation perspective based upon P/S, International Paper is overvalued.
  • International Paper maintains a credit rating of B+. This is well below investment grade, a negative.
  • International Paper maintains a beta of 1.15, higher than the average company.

Based upon its above-average beta, poor financial rating, and high P/S ratio, International Paper does not qualify as one of our Top 100 Dividend Stocks.

International Paper Co. Dividend Yield Chart (Click to enlarge) ip3

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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