(04-16-2020, 12:04 PM)saimash Wrote:(04-16-2020, 11:43 AM)MikeWa Wrote:(04-16-2020, 11:34 AM)fenders53 Wrote: Anyone else like IP? (International Paper) Boring BIZ but the Div is almost as good as MO or T and the payout ratio around 50%. I like it down here. Or is cardboard packaging going away and I just don't realize it? I think I am going to add some more IP.
I do, especially yield at this price level. I keep adding and don't think their business is going away.
Stupid question here, but thought I'd ask:
So, on March 25th IP entered a 3640day revolving credit agreement worth $750 million (to boost its liquidity)... What does this mean for the company... Is it taking in more debt against its Assets (inorder to have more liquid cash for managing its day-to-day operations/investments) ?
What does this say about the management's faith in withstanding the current event ?
In short, is this a good move ?
Nothing stupid about that question at all. IMO it means they are preparing for the unknown economy. They are securing financing for a loan they may or may not need. They pay a big div. Payout ratio is low but that could change of course. They could ask the GOV for a loan with conditions shareholders might not like. They can do that later if necessary. This isn't AAPL or JNJ liquidity for sure. They are in a tough low margin biz, but they've been in business for 122 years so I admit I have a little trust they've seen a bad economy before..