Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, IP's share price has jumped by 33.73%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.0%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Paper & Forest Products industry and the overall market, INTL PAPER CO's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $794.00 million or 22.53% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.04%.
- INTL PAPER CO's earnings per share declined by 47.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, INTL PAPER CO increased its bottom line by earning $2.99 versus $1.47 in the prior year. For the next year, the market is expecting a contraction of 16.4% in earnings ($2.50 versus $2.99).
International Paper Company operates as a paper and packaging company in North America, Europe, Latin America, Russia, Asia, and north Africa. The company has a P/E ratio of 14.1, above the average consumer non-durables industry P/E ratio of 13.6 and below the S&P 500 P/E ratio of 17.7. International has a market cap of $14.95 billion and is part of the
industry. Shares are up 15.1% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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