Is it Smart to Invest in the International Paper Co.?

Often when you come to read our blog posts here at Whitlam Group, we inform you about the latest popular trends within the labeling and packaging industry. Today will be a little different. Throughout this blog post, we’ll discuss how well the International Paper Co. has done during the North American economic collapse of the last few years. This will hopefully provide knowledge to those who have invested in International Paper Co. stock and for those who are debating on whether or not to purchase some of their shares.

The International Paper Co. controls nearly one-third of the North American containerboard supply. They have been able to increase the charging price for all boxes being shipped and they continue to increase their volume of containerboard within the North American market. This is a good sign because they cut down their dividend in 2009 in reaction to the North American economic downturn. In 2010, they increased their dividend and their dividend yield is now just over three percent.

For people debating on whether or not to purchase International Paper Co. shares, this information might help you with your decision. Just this past March, they announced their plans to obtain close to 75 percent of the Indian paper manufacturer, Andhra Pradesh Paper Mills Ltd. Not only that, International Paper Co. also purchased SCA Packaging Asia, which does work in China, Brazil and Russia. Not to mention they also purchased Weyerhaeuser’s containerboard resources back in 2008.

With all the information mentioned above, and the fact that there is a constant global need to have boxes shipped, it almost seems like there is no reason to not invest in the International Paper Co…right?

Unfortunately, there is a negative side…there always is. The biggest thing to understand is the decline of the paper industry within the U.S. and Europe markets. With everyone switching their packaging efforts to non-paper and geo-friendly packaging, the potential for International Paper Co. to lose money this year is a debatable issue.

According to Thomas Reuters, people should “buy” shares from International Paper Co. soon. They believe it’s best if people start by making six “strong buys.”

What do you think? Do you agree with the experts at Thomas Reuters or do you think the stock is on a path to failure? Let us know what you think; we would love to hear your feedback.

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