International Paper Co (IP) will cut its quarterly dividend to $0.4625 per share in 2021. This comes after a dividend hike of 2.5 percent to $0.5125 per share in the fourth quarter of 2019. Last year the paper packaging company did not change its dividend.

This lower IP dividend is payable on December 15, 2021, to holders of record at the close of business on November 15, 2021. A new annual rate of $1.85 per share yields 3.5% at a stock price of $52.87. The dividend cut will end 11 years in a row of higher dividends paid based on calendar years.

"Returning cash to shareowners through dividends and share repurchases is a meaningful part of our capital allocation framework," said Mark Sutton, Chairman and Chief Executive Officer. "Today's announcement reflects our confidence in International Paper's long-term outlook and strong free cash flow generation. We are committed to a competitive and sustainable dividend of 40 to 50% of free cash flow. The dividend adjustment we are making is consistent with our dividend policy and is well below the 15 to 20% adjustment we anticipated when we announced the spin-off of our printing papers business late last year. Additionally, share repurchases will continue to complement dividends with a consistent and thoughtful cadence that's underpinned by a commitment to maximize value creation."

International Paper Company is a producer of renewable fiber-based packaging, pulp and paper products. The company’s manufacturing operations are located in North America, Europe, Latin America, Russia, Asia, Africa and the Middle East. IP makes packaging products, pulp for diapers, tissue and other personal hygiene products, paper bags, cups and food containers and papers that facilitate education and communication.