Orchids Paper Products Company (TIS) is currently one of the highest paying dividend stocks we cover. But a more important issue is whether it is also one of the best dividend paying stocks we cover. We will show in this report that it is not.
Orchids Paper Products Company (TIS) is an integrated manufacturer of tissue paper products serving the at-home and away from home markets. TIS produces bulk rolls of tissue paper (i.e. parent rolls). It then converts these parent rolls into finished products, including paper towels, bathroom tissue, and paper napkins.
Orchids core customer base in the at-home market consists of dollar stores and other discount retailers that offer a limited selection in a smaller store format. Its core customer base in the away from home market consists of companies in the janitorial market and food service market.
Orchids Paper Products Company is headquartered in Pryor, Oklahoma, and it serves mainly the south-central and south-west regions of the United States.
In many ways, Orchids’ performance over the last 10 years has been admirable. It never cratered with the rest of the market during the stressful years of 2008/2009. And yet its price increased dramatically shortly thereafter. In the last seven years, it has been one of the best performing stocks we cover.
This performance was likely the result of the fact that Orchids was formed (it appears) mainly to buy the assets of a predecessor out of bankruptcy. Orchids Paper Company was a high-risk/high-reward investment that paid off when the management of this company was able to deliver on this newly created firm’s potential.
Unfortunately, much of that potential now seems to be factored in. Orchids Paper Products Company is unlikely to repeat this stunning performance. Its growth potential, from here on out, is only average; its price is no longer selling at a discount; and it is still a relatively risky company (despite its very low beta). TIS is not now one of our best dividend paying stocks.
Stat Sheet – Orchids Paper Company 4/20/16
|Industry||Paper & Paper Products|
|Market Cap||$ 289|
(Our assessment of this firm’s fundamentals will be in effect for the rest of calendar year 2016)
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