On Tuesday,International Paper (
) delivered a couple of pieces of good news for investors. The
paper giant announced a big increase to its dividend and unveiled
International Paper hiked its dividend by 17% to 35 cents a
share per quarter. This will be paid Dec. 16 to shareholders of
record Nov. 15. Previously it boosted its dividend in October.
International Paper's dividend has nearly doubled from the amount
it paid in March of 2011.
With the latest raise, the company pays $1.40 a share
annually, giving its stock a yield of 2.8%. International Paper
has one of the highest yields among the 12 dividend-paying stocks
in the Paper & Paper Products group.
International Paper also said it will buy back up to $1.5
billion of its own shares over the next two to three years. The
company will repurchase the shares in the open market. Stock
buybacks can increase earnings per share, as net income is
divided by a smaller number of outstanding shares.
In the past few years, International Paper has had a rocky
earnings history. Earnings fell in three of the past five years.
This is why it has a three-year Earnings Stability Factor of 28
and a five-year stability of 45. Generally, it's best to see
Earnings Stability Factors of 20 or less.
Sales also have seen ups and downs. But the firm has put
together a streak of six straight quarters of rising
Analysts polled by Thomson Reuters see earnings rising 33%
this year and 35% in 2014.
International Paper last broke out past a 49.04 buy point from
a cup-with-handle base July 25. Big buyers failed to return after
that one-day show of strength. The stock is now in a flat base or
shallow cup pattern with a 50.43 buy point.