International Paper (IP) versus Its Peers Critical Survey

International Paper (NYSE:IP) is one of 70 public companies in the “Containers & Packaging” industry, but how does it weigh in compared to its peers? We will compare International Paper to related businesses based on the strength of its institutional ownership, earnings, profitability, dividends, risk, valuation and analyst recommendations.

Dividends

International Paper pays an annual dividend of $1.85 per share and has a dividend yield of 5.5%. International Paper pays out -28.4% of its earnings in the form of a dividend. As a group, “Containers & Packaging” companies pay a dividend yield of 5.0% and pay out -77.8% of their earnings in the form of a dividend.

Earnings and Valuation

This table compares International Paper and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
International Paper	$24.20 billion	-$3.52 billion	-5.12
International Paper Competitors	$6.05 billion	$213.75 million	11.15

International Paper has higher revenue, but lower earnings than its peers. International Paper is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares International Paper and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Paper	-14.20%	-1.09%	-0.44%
International Paper Competitors	-22.83%	5.56%	1.61%

Volatility & Risk

International Paper has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, International Paper’s peers have a beta of 0.76, indicating that their average stock price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

81.9% of International Paper shares are owned by institutional investors. Comparatively, 54.3% of shares of all “Containers & Packaging” companies are owned by institutional investors. 0.2% of International Paper shares are owned by company insiders. Comparatively, 13.5% of shares of all “Containers & Packaging” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for International Paper and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Paper	1	3	10	0	2.64
International Paper Competitors	398	2372	3442	86	2.51

International Paper currently has a consensus target price of $46.90, indicating a potential upside of 40.55%. As a group, “Containers & Packaging” companies have a potential upside of 41.20%. Given International Paper’s peers higher probable upside, analysts clearly believe International Paper has less favorable growth aspects than its peers.

Summary

International Paper peers beat International Paper on 8 of the 15 factors compared.

About International Paper

International Paper Company produces and sells renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. It operates through two segments, Industrial Packaging and Global Cellulose Fibers. The company offers linerboard, medium, whitetop, recycled linerboard, recycled medium and saturating kraft; and pulp for a range of applications, such as diapers, towel and tissue products, feminine care, incontinence, and other personal care products, as well as specialty pulps for use in textiles, construction materials, paints, coatings, and others. It sells its products directly to end users and converters, as well as through agents, resellers, and distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.