Forward P/E: 10.2
No one is going to mistake International Paper (IP) for a hot growth stock — shares are up just 10% year-to-date — but it does have plenty of attractive attributes for income investors.
It’s a quality name with a return on equity of more than 15% and shares are cheap, too. The forward P/E represents a 31% discount to the S&P 500 — a steal considering the long-term growth forecast averages more than 15% a year for the next five years or so.
And despite what you might think about the death of paper in a digital age, IP still has seen enough demand to fuel several years of revenue increases, including an 8% improvement in 2012.
High-quality dividend stocks that are on sale and have a respectable yield north of 3% always have a place in an equity income portfolio.