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+--- Thread: International Paper (/showthread.php?tid=1468)
International Paper - Dividendsrule - 01-25-2016
Dang, guys,
I remember seeing IP years ago and thinking it didn't have enough of a record and then it got purchased etc etc. Last year a friend pointed it out to me and the yield was 3.2%, I knew it could have had a better valuation but I liked what i saw of the dividend history.
It is now at over 5%! Anyone have any reason that this is NOT a screaming buy right now?????????
RE: International Paper - EricL - 01-25-2016
(01-25-2016, 11:19 PM)Dividendsrule Wrote: It is now at over 5%! Anyone have any reason that this is NOT a screaming buy right now?????????
Because IP operates in a very cyclical industry and cut the dividend as recently as 2009. Earnings estimates have been dropping for both 2015 and 2016, so although the PE looks cheap at around 9 times 2015 earnings, if those numbers drop further, it won't look quite so cheap anymore.
I do agree that the current yield is attractive, just be aware of the history, it is a volatile stock.
RE: International Paper - Dividendsrule - 01-25-2016
Yeah, thanks. Got really excited there but the cyclicality is a bit of (much needed) cold water on my face.
On the other hand it does seem that management is more disciplined this time around about getting the dividend a smaller percentage of free cash flow than before? Hm...I'll sit on this. Thanks for your feedback.
RE: International Paper - Dividendsrule - 01-26-2016
God those coffee cups are so attractive...sommmmebody stop me!