Happy Thursday everyone. It’s another great day to invest in dividends stocks. “I wish there was a way to know you’re in the good old days before you’ve actually left them.” (Andy, The Office) The stock market made a fresh low recently, and it would be nice to know if the stock market is going lower, or we did find a bottom. “Well, just tell him to call me as ASAP as possible. (Michael Scott, The Office) This is so we know if we can get a better price or to invest faster to get today’s great prices.
If you guessed it from the quotes, or the title, we are investing in a paper company today. Even their name says it, International Paper (IP). The office is a TV show about a paper sales company.
International Paper (IP) manufactures paper and packaging. They have been paying an increasing dividend for 6 years. The company has 3 areas which are printer paper, industrial packaging, and consumer packaging. They were founded in 1898, which is a long time to be in business. While paper products have a big risk because of the internet, there are still a lot of paper products that have some staying power, like napkins. However, packaging is probably a lot safer, because people are going to keep buying stuff. Even with the internet, products have packaging.
International Paper (IP) is also a fairly priced company. Do you know what the PE ratio of IP is? It changes every day. Today, it is “the same as the ratio of unicorns to leprechauns.” (Stanley, The Office). Actually, it is about 16, which is a good first entry point. We also are getting a starting dividend of 5%, which is a good amount. Our P/S ratio is about .7, which means their revenue is larger than their market cap. We believe we are getting a good price on a company that has lasted a long time. While we would like their increasing dividend rate to be longer than 6 years, they have been paying some level of dividends for a long time, and we expect the track record to continue.
“I really want to have fun today, because tomorrow is going to be a nightmare.” (Erin Hannon, The Office) Who knows if the stock market will be up or down tomorrow. So today, we bought 8 shares of International Paper (IP) for $290.02, including the commissions that pay for printer paper. We will start earning $14.08 a year. I think I can buy 4 reams of paper with that a year. So many paper cuts, but so many dividends.