November 14, 2025 a 12:47 pm
📊 Dividend Analysis - International Paper Company
International Paper Company offers an intriguing dividend profile with a steady yield but faces challenges in sustainable growth. The historical consistency in dividends reflects a commitment to shareholders; however, recent financial metrics suggest potential caution for dividend sustainability.
Overview
Understanding the broader context of International Paper Company's dividend profile is essential for investors looking to balance yield with capital preservation.
| Key Metric | Value |
|---|---|
| Sector | Packaging & Containers |
| Dividend Yield | 4.88% |
| Current Dividend per Share | 1.85 USD |
| Dividend History | 56 years |
| Last Cut or Suspension | 2022 |
Dividend History
A robust dividend history signals a company's reliability in rewarding shareholders. For International Paper, it's a testament to financial resilience, though its latest suspension in 2022 necessitates scrutiny.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.85 |
| 2024 | 1.85 |
| 2023 | 1.85 |
| 2022 | 1.85 |
| 2021 | 1.92 |
Dividend Growth
Dividend growth is a critical indicator of a company’s future income potential for investors. A declining growth percentage can be a red flag.
| Time | Growth |
|---|---|
| 3 years | -1.23% |
| 5 years | -0.60% |
The average dividend growth is -0.60% over 5 years. This shows a reduction in dividend growth, posing concerns for future increase potential.
Payout Ratio
Payout ratios help measure how sustainable dividend payments are. Higher ratios can indicate potential cash flow strains.
| Key Figure | Ratio |
|---|---|
| EPS-based | -76.45% |
| Free Cash Flow-based | -353.03% |
The negatively skewed payout ratios imply severe financial distress, cautioning investors about the sustainability of dividend distributions.
Cashflow & Capital Efficiency
Evaluation of cash flows and capital efficiency reveals the operational and strategic financial dynamics of the company, critical for determining dividend sustainability and growth.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.05% | 5.52% | 9.88% |
| Earnings Yield | 2.98% | 2.30% | 11.95% |
| CAPEX to Operating Cash Flow | 54.89% | 62.25% | 42.82% |
| Stock-based Compensation to Revenue | 0.44% | 0.31% | 0.59% |
| Free Cash Flow/Operating Cash Flow Ratio | 45.11% | 37.75% | 57.18% |
The relatively high historical free cash flow yield suggests adequate operational efficiency; however, the negative figures in the latest cycle raise red flags for near-term financial flexibility.
Balance Sheet & Leverage Analysis
The balance sheet and leveraging metrics assess a company's debt levels and capacity to service them, integral for preserving dividend integrity.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 71.61% | 70.68% | 68.99% |
| Debt-to-Assets | 25.67% | 25.39% | 24.49% |
| Debt-to-Capital | 41.73% | 41.41% | 40.82% |
| Net Debt to EBITDA | 4.28 | 2.14 | 1.71 |
| Current Ratio | 1.51 | 1.67 | 1.35 |
| Quick Ratio | 1.09 | 1.19 | 0.97 |
| Financial Leverage | 2.79 | 2.78 | 2.82 |
The leverage analysis indicates a manageable debt scenario but highlights a trend of increasing financial leverage, necessitating careful monitoring of debt management practices.
Fundamental Strength & Profitability
Foundation and profitability metrics provide insight into a company's operational health and value generation potential, essential for long-term dividend viability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 6.82% | 3.45% | 17.70% |
| Return on Assets | 2.44% | 1.24% | 6.28% |
| Margins (Net) | 2.99% | 1.52% | 7.11% |
| Margins (EBIT) | 3.10% | 4.25% | 9.04% |
| Margins (EBITDA) | 10.11% | 11.82% | 13.96% |
| Margins (Gross) | 28.16% | 27.95% | 28.44% |
| R&D to Revenue | 0% | 0% | 0% |
While the overall profitability margins exhibit stability, the reduction in return on equity compared to previous years suggests potential profitability headwinds or operational inefficiencies.
Price Development
Dividend Scoring System
| Criteria | Score | Balken |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 3 | |
| Dividend Growth | 2 | |
| Payout Ratio | 1 | |
| Financial Stability | 3 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 23/40
Rating
🗣️ International Paper Company's dividend profile exhibits promising yield but falters in growth dynamics and payout sustainability. Investors should approach with caution, weighing long-term holding potential against current financial strains.