Intertape Polymer Group (TSX:ITP) is a Montreal-based packaging company that manufactures and sells paper and film based pressure sensitive and water activated tapes and other related products. Intertape stock was down 1.1% towards the end of the noon hour on March 9. The company released its 2017 fourth quarter and full-year results on March 8.
In the fourth quarter revenue climbed 13.1% year over year to $237.4 million as the company received a boost from its Cantech acquisition. Selling, general, and administrative expenses jumped 33.4% to $34.1 million largely due to share-based compensation. Intertape leadership reported that expenditures will remain at high levels in 2018 – from $80 to $90 million – as the company remains in a transition phase.
For the full-year revenue rose 11% to $898.1 million and its income tax expense dropped $6.5 million to $13 million. The company saw a $9.6 million net tax benefit largely due to the slash in the corporate rate from the U.S. Tax Cuts and Jobs Act. Adjusted EBITDA climbed 6.2% to $129.6 million as the company reported impressive organic growth in its gross profit. The board of directors also declared a dividend of $0.18 per share representing a $3.3% dividend yield.
Shares of Intertape have plunged 8% year over year, and potential growth in 2018 is likely to remain somewhat muted as the company ramps up expenditures. Still, its solid dividend and the benefits reaped from U.S. tax reform should propel the company in the coming years. Trading at a P/E ratio of 15.4, this is a nice buy and hold right now.
