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Here's Why Rayonier (RYN) Stock is an Apt Portfolio Pick Now
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Rayonier Inc. (RYN - Free Report) is well-poised to benefit from its timberland portfolio in some of the most productive timber-growing regions of the United States South, the Pacific Northwest and New Zealand.
The lumber production and capacity in the U.S. South have grown substantially over the past few years. This positions Rayonier well to capitalize on the favorable trend, given that 73% of its Southern timberlands are located in the top quartile markets.
The timber supply deficit in China makes it the largest source of demand for the New Zealand Timber segment, which exports half of its volume (excluding the Trading volume). With China likely to continue importing softwood logs and lumber, the New Zealand Timber segment is expected to do well.
Moreover, the timberland REIT’s business has significantly benefited from the recent developments in the field of biogenetics and cloning that have led to faster growth in trees, thus ensuring proper sizes for maximum extraction of wood.
Over the past few years, Rayonier has closed several strategic acquisitions to enhance the quality and expand its portfolio. In November, it entered into two separate agreements to acquire around 172,400 acres of high-quality commercial timberlands across four of the strongest U.S. South timber markets for roughly $474 million.
Rayonier maintains a strong balance sheet. It exited third-quarter 2022 with $260.9 million in cash and cash equivalents (excluding Timber Funds). Its current credit ratings of BBB- / Stable from S&P and Baa3 / Stable from Moody’s give it favorable access to the debt market.
Rayonier’s well-laddered debt maturity profile, significant asset coverage and ample financial flexibility poise it well to capitalize on future growth opportunities.
Solid dividend payouts are arguably the biggest attraction for REIT investors, and Rayonier remains committed to that. In May 2022, it increased the quarterly cash dividend on its common stock by 5.6% to 28.50 cents per share from the earlier payment of 27 cents and has maintained this payment thereafter. Such moves boost investor confidence in the stock.
Analysts, too, seem bullish on this Zacks Rank #1 (Strong Buy) company. The Zacks Consensus Estimate for the company’s 2022 earnings per share indicates a favorable outlook as it has been revised 1.6% upward in the past week to 62 cents.
Shares of RYN have gained 19% in the quarter-to-date period compared with its industry’s growth of 14.8%.
Image: Shutterstock
Here's Why Rayonier (RYN) Stock is an Apt Portfolio Pick Now
Rayonier Inc. (RYN - Free Report) is well-poised to benefit from its timberland portfolio in some of the most productive timber-growing regions of the United States South, the Pacific Northwest and New Zealand.
The lumber production and capacity in the U.S. South have grown substantially over the past few years. This positions Rayonier well to capitalize on the favorable trend, given that 73% of its Southern timberlands are located in the top quartile markets.
The timber supply deficit in China makes it the largest source of demand for the New Zealand Timber segment, which exports half of its volume (excluding the Trading volume). With China likely to continue importing softwood logs and lumber, the New Zealand Timber segment is expected to do well.
Moreover, the timberland REIT’s business has significantly benefited from the recent developments in the field of biogenetics and cloning that have led to faster growth in trees, thus ensuring proper sizes for maximum extraction of wood.
Over the past few years, Rayonier has closed several strategic acquisitions to enhance the quality and expand its portfolio. In November, it entered into two separate agreements to acquire around 172,400 acres of high-quality commercial timberlands across four of the strongest U.S. South timber markets for roughly $474 million.
Rayonier maintains a strong balance sheet. It exited third-quarter 2022 with $260.9 million in cash and cash equivalents (excluding Timber Funds). Its current credit ratings of BBB- / Stable from S&P and Baa3 / Stable from Moody’s give it favorable access to the debt market.
Rayonier’s well-laddered debt maturity profile, significant asset coverage and ample financial flexibility poise it well to capitalize on future growth opportunities.
Solid dividend payouts are arguably the biggest attraction for REIT investors, and Rayonier remains committed to that. In May 2022, it increased the quarterly cash dividend on its common stock by 5.6% to 28.50 cents per share from the earlier payment of 27 cents and has maintained this payment thereafter. Such moves boost investor confidence in the stock.
Analysts, too, seem bullish on this Zacks Rank #1 (Strong Buy) company. The Zacks Consensus Estimate for the company’s 2022 earnings per share indicates a favorable outlook as it has been revised 1.6% upward in the past week to 62 cents.
Shares of RYN have gained 19% in the quarter-to-date period compared with its industry’s growth of 14.8%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are VICI Properties (VICI - Free Report) , Lamar Advertising (LAMR - Free Report) and Equity Commonwealth (EQC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VICI Properties’ current-year funds from operations (FFO) per share is currently pegged at $1.91.
The Zacks Consensus Estimate for Lamar Advertising’s 2022 FFO per share presently stands at $7.34.
The Zacks Consensus Estimate for Equity Commonwealth’s ongoing year’s FFO per share is pegged at 16 cents, presently.