International Paper Increases Dividend by 50%

International Paper (IP) declared a quarterly dividend of $0.1875 per share today, a 50% increase over the $0.125 paid each of the last three quarters by the global paper and packaging company.

Shares of IP are trading at $27.95 (-0.60%) this afternoon, where they now carry a 2.68% dividend yield. Not bad, considering shareholders went to bed last night with the stock paying just 1.78%, but it’s still well below the 3.60% yield shares have featured, on average, over the last five years.

This is the second big dividend hike in the last year from International Paper, which quintupled its rate in April of last year.

The company’s dividend is still on the mend, however, from a 90% cut early in 2009. This annual rate of $0.75 per share is still short of its peak level of $1 per share. The company’s CEO says in the press release linked above that they intend to restore their dividend to pre-recession levels, and next year’s consensus earnings estimate produces a forward payout ratio of just 28%, so watch for more upside in the not-too-distant future.

The ex-dividend date for International Paper’s upcoming payout is February 11.

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