Overview[ edit ] The use of commercial paper has been adopted by every state in the United States except Louisiana.
The company has strong fundamentals, an appealing valuation, and a solid dividend. However, pressure from increasing debts, expensive pension plans, and weakness in the containerboard segment along with various other factors may lead to an underwhelming Q2.
IP was established in through a merger of 20 paper mills in the northeastern United States. Over the past five years, the company has divested many of its non-core businesses to focus more resources on growth areas, like industrial packaging, which can drive additional earnings expansion.
IP has also strategically divested from businesses in China in order to concentrate more on its U. Source For years the paper Paper long term has been in decline as technological advancement allows businesses, schools and the like to reduce their use of paper products.
However, of late the packaging industry has seen a revival in paper product use due to an emphasis on renewable, sustainable and most importantly biodegradable resources. To add to this, the rise of e-commerce has led to a vast increase in the amount of industrial packaging required for our consumerist way of life.
International Paper is set to take advantage of these long-term growth trends over the coming years. Source That being said, the paper industry is about as cyclical as it gets, and when companies within the sector begin looking for acquisition targets which they areit can often signal peak cycle.
Much of this stagnation and increasing indebtedness can be attributed to continued investments, divestitures and the re-purposing of mills which have obscured figures, but not all of it. Another bearish signal came just this week when the Stephens Investment Firm warned investors of possible earnings pressure in the containerboard sector, as capacity outruns demand.
However, the company comes with substantial risks both due to near-term pressure on Q2 earnings as outlined above and due to the cyclical nature of paper companies. For now, this is just another one to add to the watch list. The company consistently posts impressive cash flow figures and has stable revenues despite the continued acquisitions, divestitures and re-purposing of mills.
From K Corrugated packaging is the real growth area for IP. The company has the scale and footprint to serve almost every corrugated segment in North America.
Landau in Q1 conference call: Our deliberate focus on the fastest growing segments of corrugated packagingthose benefiting from secular growth trends is paying dividends as we apply our vast network of packaging design and innovation expertise to meet and exceed our customers changing needs.
Leading the way in both e-commerce and fresh produce and protein, our objective is to grow with these markets over time and to be well aligned with the market leaders in these segments.
Despite this potential as of now, revenues for the segment and business have been just stable. Net income, also historically stable, did see a spike since mid The company has achieved profitability each of the past five years due to its impressive ability to control costs and expenses.
One way it has done this is by reducing its employee headcount by over 8, since Additionally, IP owns its own distribution network which helps control costs and increase profits, although the unit continues to face headwinds like increasing fuel costs. In the worse-case scenario of a market recession which causes cyclical names like IP to tank, these debts may become an issue though, and they surely add to the risk for investors.Overall, I believe International Paper has a compelling growth story, something a paper company hasn't had in some time.
The strong fundamentals and solid dividend along with Q1's return to revenue growth could mean IP is a solid long-term investment.
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An appellate court on Tuesday upheld a lower court ruling that International Paper Co.’s denial of long term disability benefits to a former employee constituted an abuse of discretion. Two equal rows of 8th cut tabs.
Constructed of cost-effective lb. paper. Standard 5 hole top punch. Punch holes mylar reinforced. Tabs are color-coded and mylar reinforced.
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