The Best Dividend Growers, Part 22: International Paper

| About: International Paper (IP)


For each S&P 500 industry sector, I will be taking a look at available companies to help determine the best stocks for income investors.

In determining the best stocks per industry, I will be examining both the dividend growth and dividend yields of the stocks.

Out of this group of Paper Packaging and Products stocks, I feel that International Paper is currently the best long-term option for income investors.


In this series of articles, I will be identifying which S&P 500 stocks for various S&P industries are best suitable for income investors, based on dividend growth and yield. For Part 22, I will be taking a look at Paper Packaging and Products stocks. These stocks include:

  • Avery Dennison (NYSE:AVY)
  • Bemis Company (NYSE:BMS)
  • MeadWestvaco (MWV)
  • Sealed Air (NYSE:SEE)
  • International Paper (NYSE:IP)

When ranking the dividend paying stocks by yield, the order is as follows:

  • International Paper - 2.90%
  • Avery Dennison - 2.78%
  • Bemis Company - 2.61%
  • MeadWestvaco - 2.26%
  • Sealed Air - 1.55%

When ranking them by dividend growth over the past five years, the order is as follows:

  • International Paper - 1.30K%
  • Avery Dennison - 75.00%
  • Bemis Company - 20.00%
  • MeadWestvaco - 8.70%
  • Sealed Air - 8.33%

When going back and looking at the past ten years, the order of stocks based on dividend growth is:

  • Sealed Air - 73.33%
  • Bemis Company - 68.75%
  • International Paper - 40.00%
  • MeadWestvaco - 8.70%
  • Avery Dennison - (5.41%)

The two lowest yielding stocks (MeadWestvaco and Sealed Air) also have the lowest dividend growth over the past five years. Because of this I will only be taking a closer look at International Paper, Avery Dennison, and Bemis Company.

In terms of revenue, Bemis has seen the highest revenue growth over the past five years, while Avery Dennison's revenue growth has been mostly flat.

IP Revenue (<a href=

IP Revenue (TTM) data by YCharts

When looking at earnings, International Paper has seen the best growth, while Avery Dennison has seen the lowest growth.

IP EPS Basic Chart

IP EPS Basic (TTM) data by YCharts

In terms of valuation, all three companies have similar trailing PE ratios.

IP PE Ratio Chart

IP PE Ratio (TTM) data by YCharts

When looking at forward PE ratio, International Paper appears to be the most attractively priced stock.

IP PE Ratio (Forward) Chart

IP PE Ratio (Forward) data by YCharts


Out of the stocks in this group, International Paper offers the highest yield and has easily seen the highest dividend growth. This combination, along with the fact that the company has seen the highest earnings growth and offers the lowest forward PE ratio, leads me to believe that International Paper is currently the best long-term option available out of this group of stocks for income investors.

According to the company's latest earnings report, International Paper has strong North American SBS backlogs, record cup demand in Q1, positive momentum in the shift from foam to paper cups, and price improvement along several of its businesses. These positive signs have led the company to expand its Kenton, Ohio facility and to complete a significant capital project to its Bleached Board machine in Kwidzyn, Poland.

I feel that all of these factors have put International Paper in a position to reward long-term investors with solid returns through a high yielding, high growth dividend as well as through stock price appreciation. As always, I suggest individual investors perform their own research before making any investment decisions.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.