Leading packaging and paper manufacturer
International Paper Company
) increased its quarterly dividend by 17% year over year to 35
cents per share. The fourth quarter 2013 dividend is payable in
cash on Dec 16 to shareholders of record at the close of business
on Nov 15.
Based on the closing price of $38.56 on Sep 6, 2013, the proposed
dividend offers a yield of 2.84%. A steady dividend payout is
part of the long-term strategy of International Paper to provide
attractive risk-adjusted returns to its stockholders. In
addition, decent dividend increases at periodic intervals have
been one of the company's most attractive features.
At the same time, management authorized a share repurchase
program to purchase common shares worth $1.5 billion over a
period of 2-3 years in open market transactions. Historically,
International Paper has consistently returned significant cash to
its shareholders through dividends and share repurchases.
The current dividend increase and share repurchase
authorization further reflects the inherent strength of
International Paper's business and due diligence of management to
generate long-term profitability and sustainable free cash flow.
Headquartered in Memphis, TN, International Paper has
manufacturing operations in North America, Europe, Latin America,
Russia, Asia and North Africa. The company employs approximately
70,000 people and is strategically located in more than 24
countries serving customers worldwide.
International Paper is currently working toward transforming and
improving the profitability of its distribution business, xpedx.
Improvements are expected in procurement, replenishment orders,
reduced stock keeping Units (SKU), and supply chain (including
fewer/larger warehouses). The company is also mulling to
integrate the entire platform into a single operating system.
All these initiatives are expected to double profits. Started
in 2011, the company is at the initial stages of this multi-year
program. We believe that these initiatives will boost results and
be accretive to earnings going forward.
GLATFELTER (GLT): Free Stock Analysis Report
INTL PAPER (IP): Free Stock Analysis Report
KAPSTONE PAPER (KS): Free Stock Analysis
ROCK-TENN CO (RKT): Free Stock Analysis
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International Paper presently has a Zacks Rank #3 (Hold). Other
players in the market worth mentioning include
PH Glatfelter Co.
KapStone Paper and Packaging Corp.
), both carrying Zacks Rank #1 (Strong Buy), and
) that retains a Zacks Rank #2 (Buy).