International Paper

[Dividendsrule]

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?????????

[EricL]

(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.

[Dividendsrule]

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.

[Dividendsrule]

God those coffee cups are so attractive...sommmmebody stop me!