INTERNATIONAL PAPER CO (IP) Stock Fundamental Analysis
NYSE:IP - New York Stock Exchange, Inc. - US4601461035 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to IP. IP was compared to 23 industry peers in the Containers & Packaging industry. The financial health of IP is average, but there are quite some concerns on its profitability. IP is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year IP was profitable.
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
With a Return On Assets value of 2.44%, IP perfoms like the industry average, outperforming 47.83% of the companies in the same industry.
IP has a Return On Equity of 6.82%. This is comparable to the rest of the industry: IP outperforms 43.48% of its industry peers.
IP's Return On Invested Capital of 2.17% is on the low side compared to the rest of the industry. IP is outperformed by 78.26% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IP is below the industry average of 7.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.44% | ||
| ROE | 6.82% | ||
| ROIC | 2.17% |
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
Looking at the Profit Margin, with a value of 2.99%, IP is in line with its industry, outperforming 43.48% of the companies in the same industry.
In the last couple of years the Profit Margin of IP has declined.
With a Operating Margin value of 2.56%, IP is not doing good in the industry: 78.26% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of IP has declined.
Looking at the Gross Margin, with a value of 28.16%, IP is in the better half of the industry, outperforming 78.26% of the companies in the same industry.
IP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.56% | ||
| PM (TTM) | 2.99% | ||
| GM | 28.16% |
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.
IP has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, IP has less shares outstanding
Compared to 1 year ago, IP has a worse debt to assets ratio.
2.2 Solvency
IP has an Altman-Z score of 2.57. This is not the best score and indicates that IP is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of IP (2.57) is better than 86.96% of its industry peers.
The Debt to FCF ratio of IP is 7.35, which is on the high side as it means it would take IP, 7.35 years of fcf income to pay off all of its debts.
IP has a better Debt to FCF ratio (7.35) than 78.26% of its industry peers.
IP has a Debt/Equity ratio of 0.66. This is a neutral value indicating IP is somewhat dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.66, IP belongs to the best of the industry, outperforming 82.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 7.35 | ||
| Altman-Z | 2.57 |
ROIC/WACC0.26
WACC8.42%
2.3 Liquidity
IP has a Current Ratio of 1.51. This is a normal value and indicates that IP is financially healthy and should not expect problems in meeting its short term obligations.
IP has a Current ratio of 1.51. This is in the better half of the industry: IP outperforms 73.91% of its industry peers.
A Quick Ratio of 1.09 indicates that IP should not have too much problems paying its short term obligations.
The Quick ratio of IP (1.09) is better than 78.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The earnings per share for IP have decreased strongly by -33.70% in the last year.
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.
IP shows a decrease in Revenue. In the last year, the revenue decreased by -1.57%.
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)-1.57%
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.
IP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.17% yearly.
EPS Next Y125.65%
EPS Next 2Y77.75%
EPS Next 3Y52.35%
EPS Next 5Y32.97%
Revenue Next Year44.29%
Revenue Next 2Y23.1%
Revenue Next 3Y15.42%
Revenue Next 5Y11.17%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 37.36, IP can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of IP indicates a slightly more expensive valuation: IP is more expensive than 78.26% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.88, IP is valued a bit more expensive.
IP is valuated correctly with a Price/Forward Earnings ratio of 12.45.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IP is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of IP to the average of the S&P500 Index (21.20), we can say IP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.36 | ||
| Fwd PE | 12.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IP is valued expensively inside the industry as 82.61% of the companies are valued cheaper.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.26 | ||
| EV/EBITDA | 16 |
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 52.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.3
PEG (5Y)N/A
EPS Next 2Y77.75%
EPS Next 3Y52.35%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.88%, IP has a reasonable but not impressive dividend return.
IP's Dividend Yield is a higher than the industry average which is at 3.25.
Compared to an average S&P500 Dividend Yield of 2.45, IP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.88% |
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
115.44% of the earnings are spent on dividend by IP. This is not a sustainable payout ratio.
DP115.44%
EPS Next 2Y77.75%
EPS Next 3Y52.35%
NYSE:IP (5/1/2025, 10:20:10 AM)
44.83
-0.85 (-1.86%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners76.56%
Inst Owner Change1.48%
Ins Owners0.14%
Ins Owner Change4.41%
Market Cap23.66B
Analysts76.19
Price Target57.39 (28.02%)
Short Float %7.37%
Short Ratio6.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.88% |
Yearly Dividend1.85
Dividend Growth(5Y)-1.58%
DP115.44%
Div Incr Years0
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-57.77%
Min EPS beat(2)-180.91%
Max EPS beat(2)65.36%
EPS beat(4)2
Avg EPS beat(4)-27.99%
Min EPS beat(4)-180.91%
Max EPS beat(4)65.36%
EPS beat(8)6
Avg EPS beat(8)-2.98%
EPS beat(12)9
Avg EPS beat(12)2.94%
EPS beat(16)10
Avg EPS beat(16)1.7%
Revenue beat(2)0
Avg Revenue beat(2)-4.72%
Min Revenue beat(2)-6.28%
Max Revenue beat(2)-3.16%
Revenue beat(4)0
Avg Revenue beat(4)-3.7%
Min Revenue beat(4)-6.28%
Max Revenue beat(4)-1.56%
Revenue beat(8)0
Avg Revenue beat(8)-4.43%
Revenue beat(12)1
Avg Revenue beat(12)-3.51%
Revenue beat(16)1
Avg Revenue beat(16)-6.1%
PT rev (1m)-3.25%
PT rev (3m)-1.55%
EPS NQ rev (1m)-25.64%
EPS NQ rev (3m)-21.27%
EPS NY rev (1m)-6.69%
EPS NY rev (3m)-15.23%
Revenue NQ rev (1m)-2.05%
Revenue NQ rev (3m)30.83%
Revenue NY rev (1m)-0.63%
Revenue NY rev (3m)37.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.36 | ||
| Fwd PE | 12.45 | ||
| P/S | 1.27 | ||
| P/FCF | 31.26 | ||
| P/OCF | 14.1 | ||
| P/B | 2.9 | ||
| P/tB | 4.74 | ||
| EV/EBITDA | 16 |
EPS(TTM)1.2
EY2.68%
EPS(NY)3.6
Fwd EY8.03%
FCF(TTM)1.43
FCFY3.2%
OCF(TTM)3.18
OCFY7.09%
SpS35.27
BVpS15.48
TBVpS9.45
PEG (NY)0.3
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.44% | ||
| ROE | 6.82% | ||
| ROCE | 2.57% | ||
| ROIC | 2.17% | ||
| ROICexc | 2.32% | ||
| ROICexgc | 2.84% | ||
| OM | 2.56% | ||
| PM (TTM) | 2.99% | ||
| GM | 28.16% | ||
| FCFM | 4.07% |
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 Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 7.35 | ||
| Debt/EBITDA | 3.01 | ||
| Cap/Depr | 70.57% | ||
| Cap/Sales | 4.95% | ||
| Interest Coverage | 1.09 | ||
| Cash Conversion | 94.22% | ||
| Profit Quality | 135.91% | ||
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 2.57 |
F-Score7
WACC8.42%
ROIC/WACC0.26
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 Y125.65%
EPS Next 2Y77.75%
EPS Next 3Y52.35%
EPS Next 5Y32.97%
Revenue 1Y (TTM)-1.57%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%27.75%
Revenue Next Year44.29%
Revenue Next 2Y23.1%
Revenue Next 3Y15.42%
Revenue Next 5Y11.17%
EBIT growth 1Y-37.86%
EBIT growth 3Y-31.27%
EBIT growth 5Y-27.79%
EBIT Next Year393.63%
EBIT Next 3Y84.83%
EBIT Next 5Y48.81%
FCF growth 1Y9.39%
FCF growth 3Y-20.04%
FCF growth 5Y-20.16%
OCF growth 1Y-8.46%
OCF growth 3Y-6.15%
OCF growth 5Y-14.21%