Current Analysis: International Paper

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International Paper (IP) manufactures packaging products and cellulose fibers. It accounts for roughly one-third of the North American corrugated packaging market.

Though it has operations in Brazil, India, and China, more than three-fourths of its sales come from North America.

International Paper serves a variety of end markets, including industrial, consumer products, and manufacturing.

The company was founded in 1898 and is headquartered in Memphis, Tennessee.

Three key data points gauge International Paper Co or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

IP Price

Over the past year, Internationals share price increased about 5.58% from $33.11 to $34.96 as of Tuesday’s market close.

If International’s shares trade in the range of $30.00 to $45.00 this next year, its recent $34.96 share price might rise to $40.00 by next year. Of course, International’s price could drop about the same $5.04 estimated amount or more.

My annual upside estimate of $5.04 however, is in line with the median of one-year target prices estimated by seven analysts tracking IP’s stock for brokers.

IP Dividend

International Paper Co has paid variable quarterly dividends since March 1986. Internatioal’s most recent Q dividend of $0.4625 was declared January 9th for shareholders of record February 21st and the payout was made March 15th.

A forward-looking $1.85 annual dividend yields 5.29% at Tuesday’s $34.96 share price.

IP Returns

To put it all together, add the International Paper Co. estimated annual dividend of $1.85 to the estimated price upside of $5.04 to find a $6.89 estimated gross gain for the coming year.

At Friday’s $34.96 price, a little over $1000 would buy 29 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, would cost us about $0.345 per share.

Subtracting that likely $0.345 brokerage cost from the $6.89 gross gain reveals a net gain of $6.545 X 29 shares = $189.81 for a 19% estimated net gain on the year.

You might choose to pounce on International Paper Co. It is a 126-year-old dividend-paying Memphis Tennesee-based paper company.  Furthermore, the estimated $52.90 annual dividend income from $1k invested is over 1.5 times greater than International’s recent $34.96 share price.

The exact track of International Paper Co’s ongoing future price and dividend will entirely be determined by market action.

Remember the true value of any stock is best realized through personal ownership of shares.

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Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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