International Paper (IP -1.30%) has a new CEO, and investors appear pleased with the choice. Shares of IP are up about 10% as of 12:45 Eastern, an unusually large move for the typically mundane forestry and paper products company.
Changes at the top
International Paper investors have faced a good deal of uncertainty in recent years. The company has historically been a good choice for income-focused investors, with slow but steady growth and a predictable dividend. But that cash payout has been the subject of considerable debate since last year's divestment of the company's lucrative Russian pulp business.
Last September, IP CEO Mark Sutton announced plans to retire once a successor is found. Sutton has been with the company for forty years.
On Tuesday, the replacement was named. IP said that Andrew Silvernail would take over as CEO on May 1, with Sutton to continue as chairman of the board to help ensure a smooth transition.
Silvernail is currently an executive advisor with KKR & Co. and has previous CEO experience with manufacturing companies Madison Industries and IDEX.
Is IP a buy ahead of its CEO swap?
Some of the headwinds that have plagued International Paper appear to be subsiding. The company has so far held firm with its dividend, and improvements in cardboard pricing so far in 2024 should help boost the cash coming in. The news on an orderly CEO transition should further calm concerns about the company.
Investors buying in today enjoy a dividend yield of about 5.3%. You aren't likely to consistently get market-beating growth from this stock, but for those seeking reliable income at an affordable price, International Paper is an intriguing option.
