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Weyerhaeuser Worth Buying Now on Housing Market Strength
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We issued an updated research report on Weyerhaeuser Company (WY - Free Report) on Apr 17. Its earnings are projected to grow 5% in the next three to five years.
This building products company currently carries a Zacks Rank #2 (Buy), a revision from its earlier Zacks Rank #3 (Hold). Its market capitalization is approximately $27.6 billion.
Let’s delve deeper and discuss why investors should consider adding Weyerhaeuser’s stock to their portfolio.
Financial Performance, Share Price Movement and Earnings Estimate Revision: Weyerhaeuser’s financial performance was impressive in three of the last four quarters, with an average positive earnings surprise of 6.04%. In the last quarter, the company’s earnings of 31 cents per share increased 121.4% year over year while revenues advanced 14.2%. The sales growth came on the back of healthy Timberlands and Wood Products performance and an improved margin profile.
In the last three months, the company’s shares have yielded 3.3% return, outperforming 3% gain recorded by the industry it belongs to.
Also, the stock’s Zacks Consensus Estimate is currently $1.36 for 2018 and $1.38 for 2019. These estimates represent growth of 1.5% for 2018 and 3% for 2019 from the respective 60-day-ago tallies.
Solid Business Portfolio: Weyerhaeuser operates in three business segments — Timberlands; Real Estate, Energy and Natural Resources; and Wood Products. Between 2012 and 2017, the company expanded its assets in Timberlands from 6 million acres to 12.4 million acres, becoming the largest private owner of timberlands in the United States. Also, its Wood Products segment flaunts efficient and low-cost facilities that produce lumber, oriented strand board (OSB), engineered wood and plywood. It also operates as many as 18 distribution facilities.
The company’s Real Estate, Energy and Natural Resources segment is engaged in maximizing the value of conservation and recreation lands as well as that of important resources on surface and subsurface.
Inorganic Decisions and Capital Allocation Strategies: Weyerhaeuser took a number of inorganic decisions during 2013-2017, boosting its core timber, land and forest products business. It acquired Longview Timber in July 2013 while divested WRECO in May 2014, Cellulose Fibers pulp mills in December 2016, timberlands and manufacturing operations in Uruguay in September 2017, and its 21% equity interest in Twin Creeks Timber in October 2017.
Moreover, the company’s merger with Plum Creek Timber in February 2016 helped it to leverage the gradually improving housing market in the United States while developing and offering better products and services to its customers. The company anticipates solid housing starts to be roughly 1.3 million in 2018. Also, the improving demand for repair and remodeling activities will propel demand for building products.
Strategic Initiatives: Weyerhaeuser’s focus on operational excellence has been advantageous over time. The company reaped benefits of $172 million between 2014 and 2017 from its Timberlands segment while predicting to achieve additional $40-$50 million in 2018. These initiatives yielded benefits of $327 million between 2014 and 2017, from the Wood Products segment. Operational excellence improvement of $5-$10 million in OSB, $20-$25 million in lumber, $10-$15 million in engineered wood products and $5-$10 million in distribution are predicted to be realized from the Wood Products segment in 2018.
Capital Allocation Policy: Weyerhaeuser is focused on rewarding the shareholders handsomely. Its quarterly dividend rate grew roughly 113% since first-quarter 2011, the last hike of 3.2% being made in November 2017. The quarterly dividend rate is currently 32 cents per share, with the annual rate totaling $1.28 per share. The company aims at achieving dividend payout of 85% of funds available for distribution. Share buyback is also one of the modes of returning value to shareholders.
Investment in segmental businesses is another priority for Weyerhaeuser. For 2018, capital expenditure of $120 million is planned for the Timberlands segment while $300 million is planned for the Wood Products segment. In addition, the company believes in maintaining a healthy financial flexibility and balance sheet.
Other Stocks to Consider
Some other top-ranked stocks worth considering in the industry are Boise Cascade Company (BCC - Free Report) , Louisiana-Pacific Corporation (LPX - Free Report) and Trex Company, Inc. (TREX - Free Report) . While both Boise Cascade and Louisiana-Pacific sport a Zacks Rank #1 (Strong Buy), Trex Company carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for these three stocks improved for the current year. Also, average earnings surprise for the last four quarters was a positive 52.92% for Boise Cascade, 5.18% for Louisiana-Pacific and 11.95% for Trex Company.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
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Weyerhaeuser Worth Buying Now on Housing Market Strength
We issued an updated research report on Weyerhaeuser Company (WY - Free Report) on Apr 17. Its earnings are projected to grow 5% in the next three to five years.
This building products company currently carries a Zacks Rank #2 (Buy), a revision from its earlier Zacks Rank #3 (Hold). Its market capitalization is approximately $27.6 billion.
Let’s delve deeper and discuss why investors should consider adding Weyerhaeuser’s stock to their portfolio.
Financial Performance, Share Price Movement and Earnings Estimate Revision: Weyerhaeuser’s financial performance was impressive in three of the last four quarters, with an average positive earnings surprise of 6.04%. In the last quarter, the company’s earnings of 31 cents per share increased 121.4% year over year while revenues advanced 14.2%. The sales growth came on the back of healthy Timberlands and Wood Products performance and an improved margin profile.
In the last three months, the company’s shares have yielded 3.3% return, outperforming 3% gain recorded by the industry it belongs to.
Also, the stock’s Zacks Consensus Estimate is currently $1.36 for 2018 and $1.38 for 2019. These estimates represent growth of 1.5% for 2018 and 3% for 2019 from the respective 60-day-ago tallies.
Solid Business Portfolio: Weyerhaeuser operates in three business segments — Timberlands; Real Estate, Energy and Natural Resources; and Wood Products. Between 2012 and 2017, the company expanded its assets in Timberlands from 6 million acres to 12.4 million acres, becoming the largest private owner of timberlands in the United States. Also, its Wood Products segment flaunts efficient and low-cost facilities that produce lumber, oriented strand board (OSB), engineered wood and plywood. It also operates as many as 18 distribution facilities.
The company’s Real Estate, Energy and Natural Resources segment is engaged in maximizing the value of conservation and recreation lands as well as that of important resources on surface and subsurface.
Inorganic Decisions and Capital Allocation Strategies: Weyerhaeuser took a number of inorganic decisions during 2013-2017, boosting its core timber, land and forest products business. It acquired Longview Timber in July 2013 while divested WRECO in May 2014, Cellulose Fibers pulp mills in December 2016, timberlands and manufacturing operations in Uruguay in September 2017, and its 21% equity interest in Twin Creeks Timber in October 2017.
Moreover, the company’s merger with Plum Creek Timber in February 2016 helped it to leverage the gradually improving housing market in the United States while developing and offering better products and services to its customers. The company anticipates solid housing starts to be roughly 1.3 million in 2018. Also, the improving demand for repair and remodeling activities will propel demand for building products.
Strategic Initiatives: Weyerhaeuser’s focus on operational excellence has been advantageous over time. The company reaped benefits of $172 million between 2014 and 2017 from its Timberlands segment while predicting to achieve additional $40-$50 million in 2018. These initiatives yielded benefits of $327 million between 2014 and 2017, from the Wood Products segment. Operational excellence improvement of $5-$10 million in OSB, $20-$25 million in lumber, $10-$15 million in engineered wood products and $5-$10 million in distribution are predicted to be realized from the Wood Products segment in 2018.
Capital Allocation Policy: Weyerhaeuser is focused on rewarding the shareholders handsomely. Its quarterly dividend rate grew roughly 113% since first-quarter 2011, the last hike of 3.2% being made in November 2017. The quarterly dividend rate is currently 32 cents per share, with the annual rate totaling $1.28 per share. The company aims at achieving dividend payout of 85% of funds available for distribution. Share buyback is also one of the modes of returning value to shareholders.
Investment in segmental businesses is another priority for Weyerhaeuser. For 2018, capital expenditure of $120 million is planned for the Timberlands segment while $300 million is planned for the Wood Products segment. In addition, the company believes in maintaining a healthy financial flexibility and balance sheet.
Other Stocks to Consider
Some other top-ranked stocks worth considering in the industry are Boise Cascade Company (BCC - Free Report) , Louisiana-Pacific Corporation (LPX - Free Report) and Trex Company, Inc. (TREX - Free Report) . While both Boise Cascade and Louisiana-Pacific sport a Zacks Rank #1 (Strong Buy), Trex Company carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for these three stocks improved for the current year. Also, average earnings surprise for the last four quarters was a positive 52.92% for Boise Cascade, 5.18% for Louisiana-Pacific and 11.95% for Trex Company.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Click here to access these stocks >>