We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
UFP Industries, Inc. (UFPI) - $25 value - yours FREE >>
Weyerhaeuser Company (WY) - $25 value - yours FREE >>
Louisiana-Pacific Corporation (LPX) - $25 value - yours FREE >>
Image: Bigstock
Weyerhaeuser to Turn Preference Shares to Common Shares
Forest product manufacturer and supplier Weyerhaeuser Company (WY - Free Report) recently announced its decision to convert its outstanding 6.375% Mandatory Convertible Preference Shares, Series A into common shares. The conversion will be effective Jul 1, 2016.
As revealed, each preference share will be converted into 1.6929 Weyerhaeuser common shares. The conversion rate was determined using the average of the volume weighted average price of the company’s common shares from Jun 1 to Jun 28. The company will convert roughly 13.8 million preference shares outstanding as on Jun 28 by issuing approximately 23 million common shares. The newly issued shares will be included in the company’s basic share count.
Weyerhaeuser also announced that no fractional common shares will be issued for the conversion. However, cash compensation will be paid at the rate of $28.1226 per common share.
We believe that inflated basic share count is likely to dilute Weyerhaeuser’s earnings per share in the quarters ahead. Ending first-quarter 2016, the company had approximately 759 million common shares outstanding while it recorded earnings of 24 cents per share. For second-quarter 2016, the Zacks Consensus Estimate for the stock is 20 cents while the same is 92 cents per share for 2016 and $1.20 for 2017.
WEYERHAEUSER CO Price and Consensus
WEYERHAEUSER CO Price and Consensus | WEYERHAEUSER CO Quote
Weyerhaeuser, with a $21.8 billion market capitalization, is one of the leading U.S. forest product companies. Presently, the stock carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the building products industry include Boise Cascade Company (BCC - Free Report) , Louisiana-Pacific Corp. (LPX - Free Report) and Universal Forest Products Inc. (UFPI - Free Report) . While both Boise Cascade Company and Louisiana-Pacific sport a Zacks Rank #1 (Strong Buy), Universal Forest Products carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>