INTERNATIONAL PAPER CO (IP) Stock Fundamental Analysis
NYSE:IP - New York Stock Exchange, Inc. - US4601461035 - Common Stock - Currency: USD
IP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 22 industry peers in the Containers & Packaging industry. Both the profitability and financial health of IP have multiple concerns. While showing a medium growth rate, IP is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
IP had positive earnings in the past year.
IP had a positive operating cash flow in the past year.
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
IP's Return On Assets of -0.06% is on the low side compared to the rest of the industry. IP is outperformed by 68.18% of its industry peers.
IP has a Return On Equity of -0.15%. This is in the lower half of the industry: IP underperforms 68.18% of its industry peers.
IP has a Return On Invested Capital of 0.66%. This is in the lower half of the industry: IP underperforms 77.27% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IP is below the industry average of 7.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.06% | ||
| ROE | -0.15% | ||
| ROIC | 0.66% |
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
IP's Profit Margin has declined in the last couple of years.
IP has a worse Operating Margin (1.25%) than 77.27% of its industry peers.
In the last couple of years the Operating Margin of IP has declined.
IP has a Gross Margin of 28.30%. 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 | 1.25% | ||
| PM (TTM) | N/A | ||
| GM | 28.3% |
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.
The number of shares outstanding for IP has been increased compared to 1 year ago.
The number of shares outstanding for IP has been reduced compared to 5 years ago.
IP has a worse debt/assets ratio than last year.
2.2 Solvency
IP has an Altman-Z score of 1.52. This is a bad value and indicates that IP is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.52, IP is not doing good in the industry: 68.18% of the companies in the same industry are doing better.
IP has a Debt/Equity ratio of 0.52. This is a neutral value indicating IP is somewhat dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.52, IP belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.52 |
ROIC/WACC0.08
WACC8.54%
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.
IP's Current ratio of 1.33 is fine compared to the rest of the industry. IP outperforms 63.64% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.96, IP is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
| 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 -51.98% 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.
Looking at the last year, IP shows a quite strong growth in Revenue. The Revenue has grown by 18.13% in the last year.
Measured over the past years, IP shows a decrease in Revenue. The Revenue has been decreasing by -3.61% on average per year.
EPS 1Y (TTM)-51.98%
EPS 3Y-33.91%
EPS 5Y-23.81%
EPS Q2Q%-63.64%
Revenue 1Y (TTM)18.13%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%42.94%
3.2 Future
The Earnings Per Share is expected to grow by 29.07% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.02% on average over the next years. This is quite good.
EPS Next Y96.3%
EPS Next 2Y74.58%
EPS Next 3Y56.22%
EPS Next 5Y29.07%
Revenue Next Year40.52%
Revenue Next 2Y21.8%
Revenue Next 3Y15.09%
Revenue Next 5Y10.02%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
IP is valuated quite expensively with a Price/Earnings ratio of 55.13.
IP's Price/Earnings ratio is a bit more expensive when compared to the industry. IP is more expensive than 77.27% of the companies in the same industry.
IP is valuated expensively when we compare the Price/Earnings ratio to 26.82, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.49, which indicates a correct valuation of IP.
The rest of the industry has a similar Price/Forward Earnings ratio as IP.
When comparing the Price/Forward Earnings ratio of IP to the average of the S&P500 Index (35.24), we can say IP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.13 | ||
| Fwd PE | 13.49 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IP is valued a bit more expensive than the industry average as 77.27% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.97 |
4.3 Compensation for Growth
IP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
IP's earnings are expected to grow with 56.22% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.57
PEG (5Y)N/A
EPS Next 2Y74.58%
EPS Next 3Y56.22%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.87%, IP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.13, IP pays a better dividend. On top of this IP pays more dividend than 86.36% of the companies listed in the same industry.
IP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.87% |
5.2 History
The dividend of IP decreases each year by -1.58%.
IP has paid a dividend for at least 10 years, which is 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 has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-3000%
EPS Next 2Y74.58%
EPS Next 3Y56.22%
46.86
+0.26 (+0.56%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.34%
Inst Owner Change-6.49%
Ins Owners0.16%
Ins Owner Change2.19%
Market Cap24.74B
Analysts75.45
Price Target55.53 (18.5%)
Short Float %8.71%
Short Ratio11.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.87% |
Yearly Dividend1.85
Dividend Growth(5Y)-1.58%
DP-3000%
Div Incr Years0
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-46.11%
Min EPS beat(2)-52.48%
Max EPS beat(2)-39.75%
EPS beat(4)1
Avg EPS beat(4)-51.94%
Min EPS beat(4)-180.91%
Max EPS beat(4)65.36%
EPS beat(8)4
Avg EPS beat(8)-22.61%
EPS beat(12)7
Avg EPS beat(12)-9.35%
EPS beat(16)9
Avg EPS beat(16)-5.11%
Revenue beat(2)0
Avg Revenue beat(2)-4.94%
Min Revenue beat(2)-7.84%
Max Revenue beat(2)-2.04%
Revenue beat(4)0
Avg Revenue beat(4)-4.83%
Min Revenue beat(4)-7.84%
Max Revenue beat(4)-2.04%
Revenue beat(8)0
Avg Revenue beat(8)-4.48%
Revenue beat(12)0
Avg Revenue beat(12)-4.25%
Revenue beat(16)1
Avg Revenue beat(16)-4.57%
PT rev (1m)-1.2%
PT rev (3m)-2.19%
EPS NQ rev (1m)-14.76%
EPS NQ rev (3m)-23.41%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.01%
Revenue NQ rev (1m)1.22%
Revenue NQ rev (3m)-0.81%
Revenue NY rev (1m)0.74%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.13 | ||
| Fwd PE | 13.49 | ||
| P/S | 1.13 | ||
| P/FCF | N/A | ||
| P/OCF | 22.37 | ||
| P/B | 1.33 | ||
| P/tB | 3.7 | ||
| EV/EBITDA | 15.97 |
EPS(TTM)0.85
EY1.81%
EPS(NY)3.47
Fwd EY7.41%
FCF(TTM)-0.22
FCFYN/A
OCF(TTM)2.09
OCFY4.47%
SpS41.54
BVpS35.26
TBVpS12.65
PEG (NY)0.57
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.06% | ||
| ROE | -0.15% | ||
| ROCE | 0.78% | ||
| ROIC | 0.66% | ||
| ROICexc | 0.68% | ||
| ROICexgc | 1.04% | ||
| OM | 1.25% | ||
| PM (TTM) | N/A | ||
| GM | 28.3% | ||
| 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-Score5
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.64 | ||
| Cap/Depr | 67.36% | ||
| Cap/Sales | 5.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 52.89% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 1.52 |
F-Score5
WACC8.54%
ROIC/WACC0.08
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)-51.98%
EPS 3Y-33.91%
EPS 5Y-23.81%
EPS Q2Q%-63.64%
EPS Next Y96.3%
EPS Next 2Y74.58%
EPS Next 3Y56.22%
EPS Next 5Y29.07%
Revenue 1Y (TTM)18.13%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%42.94%
Revenue Next Year40.52%
Revenue Next 2Y21.8%
Revenue Next 3Y15.09%
Revenue Next 5Y10.02%
EBIT growth 1Y-46.8%
EBIT growth 3Y-31.27%
EBIT growth 5Y-27.79%
EBIT Next Year385.76%
EBIT Next 3Y89%
EBIT Next 5Y47.98%
FCF growth 1Y-113.1%
FCF growth 3Y-20.04%
FCF growth 5Y-20.16%
OCF growth 1Y-46.54%
OCF growth 3Y-6.15%
OCF growth 5Y-14.21%