Why International Paper (IP) Remains a Top Choice for Materials Dividends in 2025

International Paper Company (NYSE:IP) is included among the 13 Best Materials Dividend Stocks to Buy Right Now.

Why International Paper (IP) Remains a Top Choice for Materials Dividends in 2025

A close-up view of a hand assembling boxes of industrial packaging on an assembly line.

International Paper Company (NYSE:IP) produces a wide range of paper and packaging products and also makes cellulose fibers, which are essential in products such as diapers, baby wipes, and feminine hygiene items.

For investors, International Paper Company (NYSE:IP) offers a relatively stable source of income, making it appealing to those who prefer steady, low-volatility investments. Around 54% of its sales come from processed food and beverage (34%) and fresh food (20%) markets. An additional 18% comes from the growing e-commerce and logistics sector, with the remaining revenue generated from durable and non-durable goods.

International Paper Company (NYSE:IP)’s management expects to generate between $2 billion and $2.5 billion in free cash flow by 2027 and intends to return 40% to 50% of that amount to shareholders through dividends. Based on the midpoint of these estimates, projected cash dividends in 2027 would total around $1.01 billion, a notable increase from the $643 million distributed in 2024.

International Paper Company (NYSE:IP) has paid uninterrupted dividends since 1986. The company currently offers a quarterly dividend of $0.4625 per share and has a dividend yield of 3.40%, as of July 29.

While we acknowledge the potential of IP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than IP and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.