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. Both the profitability and financial health of IP have multiple concerns. 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.
IP had positive earnings in each of the past 5 years.
In the past 5 years IP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of IP (0.96%) is worse than 72.73% of its industry peers.
The Return On Equity of IP (2.19%) is worse than 72.73% of its industry peers.
IP has a Return On Invested Capital of 0.78%. This is in the lower half of the industry: IP underperforms 77.27% of its industry peers.
IP had an Average Return On Invested Capital over the past 3 years of 4.45%. This is below the industry average of 7.58%.
| 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
The Profit Margin of IP (1.99%) is comparable to the rest of the industry.
IP's Profit Margin has declined in the last couple of years.
IP's Operating Margin of 1.58% is on the low side compared to the rest of the industry. IP is outperformed by 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so IP is destroying value.
Compared to 1 year ago, IP has more shares outstanding
The number of shares outstanding for IP has been reduced compared to 5 years ago.
Compared to 1 year ago, IP has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.59, we must say that IP is in the distress zone and has some risk of bankruptcy.
IP has a Altman-Z score of 1.59. This is in the lower half of the industry: IP underperforms 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.
With an excellent Debt to Equity ratio value of 0.51, IP belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.59 |
ROIC/WACC0.09
WACC8.62%
2.3 Liquidity
IP has a Current Ratio of 1.33. This is a normal value and indicates that IP is financially healthy and should not expect problems in meeting 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.
The Quick ratio of IP (0.96) is better than 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
IP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -33.70%.
Measured over the past years, IP shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -23.81% on average per year.
Looking at the last year, IP shows a small growth in Revenue. The Revenue has grown by 7.49% in the last year.
The Revenue has been decreasing by -3.61% on average over the past years.
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
Based on estimates for the next years, IP will show a very strong growth in Earnings Per Share. The EPS will grow by 30.29% on average per year.
IP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.64% yearly.
EPS Next Y96.3%
EPS Next 2Y74.58%
EPS Next 3Y56.22%
EPS Next 5Y30.29%
Revenue Next Year39.48%
Revenue Next 2Y21.08%
Revenue Next 3Y14.35%
Revenue Next 5Y10.64%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 43.88, the valuation of IP can be described as expensive.
Based on the Price/Earnings ratio, IP is valued more expensive than 81.82% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.53. IP is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 15.15 indicates a correct valuation of IP.
The rest of the industry has a similar Price/Forward Earnings ratio as IP.
IP is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.71, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.88 | ||
| Fwd PE | 15.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IP is valued expensively inside the industry as 81.82% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 18.61 |
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 56.22% in the coming years.
PEG (NY)0.46
PEG (5Y)N/A
EPS Next 2Y74.58%
EPS Next 3Y56.22%
5. Dividend
5.1 Amount
IP has a Yearly Dividend Yield of 3.63%.
IP's Dividend Yield is rather good when compared to the industry average which is at 2.95. IP pays more dividend than 86.36% of the companies in the same industry.
IP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.63% |
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.
The dividend of IP decreased 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 2Y74.58%
EPS Next 3Y56.22%
52.65
+1.29 (+2.51%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.24%
Inst Owner Change0.05%
Ins Owners0.16%
Ins Owner Change4.84%
Market Cap27.79B
Analysts75.45
Price Target56.55 (7.41%)
Short Float %8.55%
Short Ratio10.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.63% |
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)1.51%
PT rev (3m)-5.77%
EPS NQ rev (1m)1.47%
EPS NQ rev (3m)-28.76%
EPS NY rev (1m)0.61%
EPS NY rev (3m)-13.01%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)-1.78%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)-3.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.88 | ||
| Fwd PE | 15.15 | ||
| P/S | 1.4 | ||
| P/FCF | N/A | ||
| P/OCF | 27.99 | ||
| P/B | 1.54 | ||
| P/tB | 4.44 | ||
| EV/EBITDA | 18.61 |
EPS(TTM)1.2
EY2.28%
EPS(NY)3.47
Fwd EY6.6%
FCF(TTM)-0.01
FCFYN/A
OCF(TTM)1.88
OCFY3.57%
SpS37.7
BVpS34.27
TBVpS11.87
PEG (NY)0.46
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 | 1.59 |
F-Score7
WACC8.62%
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 Y96.3%
EPS Next 2Y74.58%
EPS Next 3Y56.22%
EPS Next 5Y30.29%
Revenue 1Y (TTM)7.49%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%27.75%
Revenue Next Year39.48%
Revenue Next 2Y21.08%
Revenue Next 3Y14.35%
Revenue Next 5Y10.64%
EBIT growth 1Y-47.23%
EBIT growth 3Y-31.27%
EBIT growth 5Y-27.79%
EBIT Next Year379.33%
EBIT Next 3Y87.32%
EBIT Next 5Y47.2%
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%