This boring stock could be a great long term investment.

Intertape Polymer Group

Intertape Polymer Group (ITP) is not a sexy stock.  Most people probably haven’t heard of them.  They are one of the largest companies in the “packaging” industry.  Most notably they make adhesive tapes used in shipping.  Their largest customer is a little company called Amazon- perhaps you’ve heard of them.

Since 2010, ITP has performed remarkably for shareholders, a stunning 24.66% average annual return.  Had you invested $10,000 in ITP in 2010, it would be worth almost $71,000 today!

The stock has come down from it’s previous highs due to a couple slower than expected quarters, and some acquisitions taking longer than expected to produce results.  The company also took on some debt to finance the acquisitions and plant upgrades.  Today ITP is trading at $17.00 which is down $5.84 from its 52 high!  The third quarter results were released earlier this month, and things looked pretty good.  Here are some highlights(reported in $USD:

  • Quarterly revenue increased 14.6% to $279.1 million
  • Quarterly IPG Net Earnings decreased $7.2 million to $12.0 million
  • Quarterly IPG Adjusted Net Earnings increased $4.9 million to $20.3 million
  • Quarterly adjusted EBITDA increased 15.9% to $37.6 million

This stock tends to perform well near the end of the year (Black Friday, Christmas,) so don’t be surprised to see a nice pop after a big 4th quarter.

Income oriented investors should look at ITP as well, as the stock is currently yielding 4.36% and has increased it’s dividend from $0.08 to $0.14 since 2014. It’s worth noting that the dividend is paid in $USD as well.  The dividend looks safe, as the payout ratio is only about 50%. Once ITP starts seeing some extra cashflow from the recent acquisitions and plant improvements, it wouldn’t surprise me if another dividend hike was in the future as well.

Today the stock is trading at a reasonable 10.9 X Earnings, pays a solid and growing dividend, and trading at a nice discount to it’s 52 week high.  I know there are a lot of bargains out there right now, but if you are patient, and are bullish on the whole E-Commerce/online shopping thing – Intertape Polymer could be a great long term play for both growth and income.


2 Comments on “This boring stock could be a great long term investment.

  1. always liked this stock!

    We use their products in house construction too.

    nice breakdown. so much to buy so little money.



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