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 3 out of 10 to IP. IP was compared to 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.
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
Looking at the Return On Assets, with a value of 0.96%, IP is doing worse than 72.73% of the companies in the same industry.
IP has a worse Return On Equity (2.19%) 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.
With a Operating Margin value of 1.58%, IP is not doing good in the industry: 77.27% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of IP has declined.
The Gross Margin of IP (28.59%) is better than 77.27% of its industry peers.
In the last couple of years the Gross Margin of IP has declined.
| 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
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
Based on the Altman-Z score of 1.51, we must say that IP is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.51, IP is doing worse than 68.18% of the companies in the same industry.
A Debt/Equity ratio of 0.51 indicates that IP is somewhat dependend on debt financing.
IP's Debt to Equity ratio of 0.51 is amongst the best of the industry. IP outperforms 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.51 |
ROIC/WACC0.09
WACC8.83%
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 has a better Current ratio (1.33) than 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.
IP has a Quick ratio of 0.96. This is in the better half of the industry: IP outperforms 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%.
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
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.
The Revenue is expected to grow by 10.64% on average over the next years. This is quite good.
EPS Next Y96.01%
EPS Next 2Y73.56%
EPS Next 3Y55.34%
EPS Next 5Y30.29%
Revenue Next Year39.71%
Revenue Next 2Y21.31%
Revenue Next 3Y14.24%
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.
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 38.24.
81.82% of the companies in the same industry are cheaper than IP, based on the Price/Earnings ratio.
IP is valuated rather expensively when we compare the Price/Earnings ratio to 26.31, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.36, IP is valued correctly.
The rest of the industry has a similar Price/Forward Earnings ratio as IP.
The average S&P500 Price/Forward Earnings ratio is at 22.13. IP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.24 | ||
| Fwd PE | 13.36 |
4.2 Price Multiples
81.82% of the companies in the same industry are cheaper than IP, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 17.1 |
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)0.4
PEG (5Y)N/A
EPS Next 2Y73.56%
EPS Next 3Y55.34%
5. Dividend
5.1 Amount
IP has a Yearly Dividend Yield of 3.92%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.07, IP pays a better dividend. On top of this IP pays more dividend than 86.36% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, IP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.92% |
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
183.33% of the earnings are spent on dividend by IP. This is not a sustainable payout ratio.
DP183.33%
EPS Next 2Y73.56%
EPS Next 3Y55.34%
45.89
-1.26 (-2.67%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)
Earnings (Next)
Inst Owners94.24%
Inst Owner Change22.66%
Ins Owners0.16%
Ins Owner Change4.9%
Market Cap24.23B
Analysts75.24
Price Target55.71 (21.4%)
Short Float %7.72%
Short Ratio7.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.92% |
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)-1.87%
PT rev (3m)-6.08%
EPS NQ rev (1m)0.36%
EPS NQ rev (3m)-40.47%
EPS NY rev (1m)0%
EPS NY rev (3m)-18.2%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-3.36%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-3.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.24 | ||
| Fwd PE | 13.36 | ||
| P/S | 1.22 | ||
| P/FCF | N/A | ||
| P/OCF | 24.4 | ||
| P/B | 1.34 | ||
| P/tB | 3.87 | ||
| EV/EBITDA | 17.1 |
EPS(TTM)1.2
EY2.61%
EPS(NY)3.43
Fwd EY7.48%
FCF(TTM)-0.01
FCFYN/A
OCF(TTM)1.88
OCFY4.1%
SpS37.7
BVpS34.27
TBVpS11.87
PEG (NY)0.4
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 | 1.51 |
F-Score7
WACC8.83%
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 5Y30.29%
Revenue 1Y (TTM)7.49%
Revenue growth 3Y-1.3%
Revenue growth 5Y-3.61%
Sales Q2Q%27.75%
Revenue Next Year39.71%
Revenue Next 2Y21.31%
Revenue Next 3Y14.24%
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%