INTERNATIONAL PAPER CO (IP) Stock Fundamental Analysis
NYSE:IP - New York Stock Exchange, Inc. - US4601461035 - Common Stock - Currency: USD
Overall IP gets a fundamental rating of 3 out of 10. We evaluated IP against 22 industry peers in the Containers & Packaging industry. IP may be in some trouble as it scores bad on both profitability and health. IP is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
IP had positive earnings in the past year.
In the past year IP had a positive cash flow from operations.
Each year in the past 5 years IP has been profitable.
In the past 5 years IP always reported a positive cash flow from operatings.
1.2 Ratios
IP has a worse Return On Assets (0.96%) than 68.18% of its industry peers.
With a Return On Equity value of 2.19%, IP is not doing good in the industry: 68.18% of the companies in the same industry are doing better.
IP's Return On Invested Capital of 0.78% is on the low side compared to the rest of the industry. IP is outperformed by 77.27% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IP is below the industry average of 7.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.96% | ||
| ROE | 2.19% | ||
| ROIC | 0.78% |
ROA(3y)3.32%
ROA(5y)3.68%
ROE(3y)9.32%
ROE(5y)10.68%
ROIC(3y)4.45%
ROIC(5y)4.83%
1.3 Margins
With a Profit Margin value of 1.99%, IP perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
IP's Profit Margin has declined in the last couple of years.
IP has a worse Operating Margin (1.58%) than 77.27% of its industry peers.
IP's Operating Margin has declined in the last couple of years.
IP has a Gross Margin of 28.59%. This is in the better half of the industry: IP outperforms 77.27% of its industry peers.
IP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.58% | ||
| PM (TTM) | 1.99% | ||
| GM | 28.59% |
OM growth 3Y-30.36%
OM growth 5Y-25.08%
PM growth 3Y-30.85%
PM growth 5Y-11.38%
GM growth 3Y-0.48%
GM growth 5Y-2.38%
2. Health
2.1 Basic Checks
IP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, IP has more shares outstanding
IP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for IP is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.55, we must say that IP is in the distress zone and has some risk of bankruptcy.
IP has a worse Altman-Z score (1.55) than 68.18% of its industry peers.
IP has a Debt/Equity ratio of 0.51. This is a neutral value indicating IP is somewhat dependend on debt financing.
The Debt to Equity ratio of IP (0.51) is better than 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.55 |
ROIC/WACC0.09
WACC8.68%
2.3 Liquidity
A Current Ratio of 1.33 indicates that IP should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.33, IP is doing good in the industry, outperforming 63.64% of the companies in the same industry.
IP has a Quick Ratio of 1.33. This is a bad value and indicates that IP is not financially healthy enough and could expect problems in meeting its short term obligations.
IP's Quick ratio of 0.96 is fine compared to the rest of the industry. IP outperforms 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The earnings per share for IP have decreased strongly by -33.70% in the last year.
IP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -23.81% yearly.
IP shows a small growth in Revenue. In the last year, the Revenue has grown by 7.49%.
IP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.61% yearly.
EPS 1Y (TTM)-33.7%
EPS 3Y-33.91%
EPS 5Y-23.81%
EPS Q2Q%35.29%
Revenue 1Y (TTM)7.49%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%27.75%
3.2 Future
IP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 32.97% yearly.
Based on estimates for the next years, IP will show a quite strong growth in Revenue. The Revenue will grow by 11.17% on average per year.
EPS Next Y96.01%
EPS Next 2Y73.56%
EPS Next 3Y55.34%
EPS Next 5Y32.97%
Revenue Next Year39.65%
Revenue Next 2Y21.28%
Revenue Next 3Y14.21%
Revenue Next 5Y11.17%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 40.55, which means the current valuation is very expensive for IP.
Based on the Price/Earnings ratio, IP is valued a bit more expensive than 77.27% of the companies in the same industry.
When comparing the Price/Earnings ratio of IP to the average of the S&P500 Index (26.03), we can say IP is valued expensively.
A Price/Forward Earnings ratio of 14.17 indicates a correct valuation of IP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IP is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.94, IP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.55 | ||
| Fwd PE | 14.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IP is valued more expensive than 81.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 17.86 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as IP's earnings are expected to grow with 55.34% in the coming years.
PEG (NY)0.42
PEG (5Y)N/A
EPS Next 2Y73.56%
EPS Next 3Y55.34%
5. Dividend
5.1 Amount
IP has a Yearly Dividend Yield of 3.73%.
Compared to an average industry Dividend Yield of 3.20, IP pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, IP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
5.2 History
The dividend of IP decreases each year by -1.58%.
IP has been paying a dividend for at least 10 years, so it has a reliable track record.
IP has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-1.58%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
IP pays out 183.33% of its income as dividend. This is not a sustainable payout ratio.
DP183.33%
EPS Next 2Y73.56%
EPS Next 3Y55.34%
48.66
-1.35 (-2.7%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners76.56%
Inst Owner Change22.41%
Ins Owners0.14%
Ins Owner Change4.89%
Market Cap25.69B
Analysts76.19
Price Target56.78 (16.69%)
Short Float %7.21%
Short Ratio6.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
Yearly Dividend1.85
Dividend Growth(5Y)-1.58%
DP183.33%
Div Incr Years0
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-110.33%
Min EPS beat(2)-180.91%
Max EPS beat(2)-39.75%
EPS beat(4)2
Avg EPS beat(4)-31.48%
Min EPS beat(4)-180.91%
Max EPS beat(4)65.36%
EPS beat(8)5
Avg EPS beat(8)-9.58%
EPS beat(12)8
Avg EPS beat(12)-3.98%
EPS beat(16)9
Avg EPS beat(16)-2%
Revenue beat(2)0
Avg Revenue beat(2)-7.06%
Min Revenue beat(2)-7.84%
Max Revenue beat(2)-6.28%
Revenue beat(4)0
Avg Revenue beat(4)-5.27%
Min Revenue beat(4)-7.84%
Max Revenue beat(4)-3.16%
Revenue beat(8)0
Avg Revenue beat(8)-5.12%
Revenue beat(12)0
Avg Revenue beat(12)-4.27%
Revenue beat(16)1
Avg Revenue beat(16)-5.56%
PT rev (1m)-5.4%
PT rev (3m)-3.05%
EPS NQ rev (1m)-30.04%
EPS NQ rev (3m)-40.69%
EPS NY rev (1m)-13.13%
EPS NY rev (3m)-18.2%
Revenue NQ rev (1m)-1.64%
Revenue NQ rev (3m)-3.2%
Revenue NY rev (1m)-3.13%
Revenue NY rev (3m)-4.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.55 | ||
| Fwd PE | 14.17 | ||
| P/S | 1.29 | ||
| P/FCF | N/A | ||
| P/OCF | 25.87 | ||
| P/B | 1.42 | ||
| P/tB | 4.1 | ||
| EV/EBITDA | 17.86 |
EPS(TTM)1.2
EY2.47%
EPS(NY)3.43
Fwd EY7.06%
FCF(TTM)-0.01
FCFYN/A
OCF(TTM)1.88
OCFY3.87%
SpS37.7
BVpS34.27
TBVpS11.87
PEG (NY)0.42
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.96% | ||
| ROE | 2.19% | ||
| ROCE | 0.92% | ||
| ROIC | 0.78% | ||
| ROICexc | 0.8% | ||
| ROICexgc | 1.25% | ||
| OM | 1.58% | ||
| PM (TTM) | 1.99% | ||
| GM | 28.59% | ||
| FCFM | N/A |
ROA(3y)3.32%
ROA(5y)3.68%
ROE(3y)9.32%
ROE(5y)10.68%
ROIC(3y)4.45%
ROIC(5y)4.83%
ROICexc(3y)4.69%
ROICexc(5y)5.36%
ROICexgc(3y)5.71%
ROICexgc(5y)6.5%
ROCE(3y)5.27%
ROCE(5y)5.71%
ROICexcg growth 3Y-27.83%
ROICexcg growth 5Y-21.92%
ROICexc growth 3Y-28.5%
ROICexc growth 5Y-22.76%
OM growth 3Y-30.36%
OM growth 5Y-25.08%
PM growth 3Y-30.85%
PM growth 5Y-11.38%
GM growth 3Y-0.48%
GM growth 5Y-2.38%
F-Score7
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.8 | ||
| Cap/Depr | 62.58% | ||
| Cap/Sales | 5.02% | ||
| Interest Coverage | 0.72 | ||
| Cash Conversion | 51.94% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 1.55 |
F-Score7
WACC8.68%
ROIC/WACC0.09
Cap/Depr(3y)79.92%
Cap/Depr(5y)68.7%
Cap/Sales(3y)5.13%
Cap/Sales(5y)4.5%
Profit Quality(3y)152.94%
Profit Quality(5y)204.52%
High Growth Momentum
Growth
EPS 1Y (TTM)-33.7%
EPS 3Y-33.91%
EPS 5Y-23.81%
EPS Q2Q%35.29%
EPS Next Y96.01%
EPS Next 2Y73.56%
EPS Next 3Y55.34%
EPS Next 5Y32.97%
Revenue 1Y (TTM)7.49%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%27.75%
Revenue Next Year39.65%
Revenue Next 2Y21.28%
Revenue Next 3Y14.21%
Revenue Next 5Y11.17%
EBIT growth 1Y-47.23%
EBIT growth 3Y-31.27%
EBIT growth 5Y-27.79%
EBIT Next Year393.63%
EBIT Next 3Y84.83%
EBIT Next 5Y48.81%
FCF growth 1Y-100.83%
FCF growth 3Y-20.04%
FCF growth 5Y-20.16%
OCF growth 1Y-48.58%
OCF growth 3Y-6.15%
OCF growth 5Y-14.21%