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4 Stocks That Could Use (Another) Kick in the Dividend Pants

The 10-year Treasury's shadow is looming over these yields

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International Paper

InternationalPaper185Dividend Yield: 2.5%
Last Dividend Increase: 14%, August 2012

It’s not a stretch to imagine that a company whose CEO acknowledges “there’s room for” a dividend increase … well, has room for a dividend increase.

And that’s exactly what International Paper (IP) CEO John Faraci said back in May.

It’s not that International Paper doesn’t pay dividends or hasn’t increased its payout, it’s just that its recent history is a little inconsistent. After a dramatic cut from 25 cents to just 3 cents in 2009, increases have come in spurts — three consecutive quarters at the 3-cent level were followed by three at 13 cents, one quarter at 19 cents and six at 26 cents.

So we’re actually above the original dividend … we just got there in a loopy way, and we’re only a penny better after four years.

IP shares themselves are doing well — with 21% year-to-date gains, they’re still ahead of the broader market, so shareholders aren’t exactly banging down the door. Still, IP sits on more than $900 million in cash, and brought in $478 million in free cash flow just to support a quarterly payout of $132 million. A 25% hike here would get IP to the 3% yield threshold.

After all … there’s room.

Article printed from InvestorPlace Media,

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