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Are Investors Undervaluing International Paper (IP) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is International Paper (IP - Free Report) . IP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

IP is also sporting a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IP's industry currently sports an average PEG of 1.01. IP's PEG has been as high as 1.84 and as low as 0.75, with a median of 1.09, all within the past year.

Finally, our model also underscores that IP has a P/CF ratio of 4.23. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. IP's P/CF compares to its industry's average P/CF of 5.23. IP's P/CF has been as high as 10.50 and as low as 3.63, with a median of 5.44, all within the past year.

These are only a few of the key metrics included in International Paper's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, IP looks like an impressive value stock at the moment.


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