Spinoff spotlight: International Paper & Sylvamo

Article Excerpt

INTERNATIONAL PAPER CO. $44 is a spinoff buy. The company (New York symbol IP, Manufacturing & Industry sector; Shares outstanding: 376.4 million; Market cap: $16.6 billion; Dividend yield: 4.4%; Takeover Target Rating: Medium; www.internationalpaper.com) is a leading provider of cardboard packaging and related products. In October 2021, it spun off its printing papers business as a separate company called SYLVAMO CORP. $35, which we also see as a spinoff buy. Sylvamo (New York symbol SLVM, Manufacturing & Industry sector; Shares outstanding: 44.0 million; Market cap: $1.5 billion; No dividend paid; Takeover Target Rating: Medium; www.sylvamo.com) mainly produces uncoated papers. Investors received one SLVM share for every 11 share of International Paper they held. The former parent still owns 19.9% of the spinoff and plans to sell that stake at some point. In response to Russia’s invasion of Ukraine, International Paper is now exploring strategic options for Ilim S.A., a 50/50 joint venture that produces pulp and paper at three mills in Russia. Sylvamo has also suspended its operations in Russia. Even if they…