- International Paper (NYSE:IP) has 25% upside plus a healthy dividend, Barron's says, as online retailing growth spurs demand for cardboard boxes from the world’s biggest producer of containerboard and corrugated packaging.
- IP has hiked its annual payout, on average, by 12% over the past five years. The stock yields 3.5%.
- Sales of boxes to Amazon (NASDAQ:AMZN) is part of the story. While IP doesn't break out the percentage of sales that go to Amazon and other e-commerce firms, analysts estimate it at 6-7% of the company's total sales, up from 4% in 2015.
- Fewer competitors means pricing and capacity are more disciplined, making the business more profitable and less volatile. "IP is still perceived as a very cyclical story, but it is less so today," says Harry Cohen, co-chief investment officer of ClearBridge Investments, which owns the stock.
- Now read: 28 'Safer' Consumer Cyclical Gains Piloted By Stores, Leisure, Resorts, Publishers, And Paper For April
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