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Rayonier (RYN) Completes the Oregon Timberland Divestiture
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Rayonier Inc. (RYN - Free Report) completed the sale of 55,000 acres of timberland in Oregon to Manulife Investment Management for $242 million, approximately $4,400 per acre.
This transaction marks a significant milestone in RYN's asset disposition and capital structure realignment plan, aiming for $1 billion in select asset sales over 18 months, as announced on Nov 1.
The company utilized $150 million of the proceeds to reduce its only floating-rate debt. The company’s board of directors declared a one-time, special cash dividend of 20 cents per common share, payable on Jan 12, 2024, to shareholders of record on Dec 29, 2023. Approximately $30 million will be allocated for this special dividend. The remaining proceeds will be retained for additional debt reduction or other capital allocation purposes.
RYN is actively pursuing the sale of additional timberland assets to capitalize on the gap between public and private timberland values. This strategic effort is intended to position the balance sheet for a higher interest rate environment while simultaneously returning significant capital to shareholders.
Price Performance
Image Source: Zacks Investment Research
Shares of RYN fell 2% on Dec 18 during the after-hour trading session. The stock has gained 12.9% in the past three months compared with the Zacks Building Products - Wood industry’s growth of 11.2%. The company is well-positioned 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 in the past few years. This positions Rayonier to capitalize on the favorable trend, given that 73% of its Southern timberlands are located in the top quartile markets.
In November, the company announced its capital structure realignment plan, through which it targets disposing of select assets totaling $1 billion over the next 18 months. This will enhance shareholders’ value and credit ratios, providing scope for greater capital allocation flexibility and improving CAD per share. It aims to maintain net debt to adjusted EBITDA within 3.0X compared with 4.5X targeted earlier.
Zacks Rank & Key Picks
Rayonier currently sports a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Construction sector are:
The Zacks Consensus Estimate for EME’s 2023 sales and earnings per share (EPS) suggests growth of 12% and 52.8%, respectively, from the year-ago period’s levels.
M-tron Industries, Inc. (MPTI - Free Report) currently sports a Zacks Rank of 1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average. It has surged 252.3% in the past year.
The Zacks Consensus Estimate for MPTI’s 2023 sales and EPS indicates growth of 30.6% and 156.7%, respectively, from the previous year’s levels.
AECOM (ACM - Free Report) carries a Zacks Rank of #2 (Buy). It has a trailing four-quarter earnings surprise of 2.1%, on average. Shares of ACM have surged 11% in the past year.
The Zacks Consensus Estimate for ACM’s 2024 sales and EPS indicates an increase of 4.5% and 17.5%, respectively, from the year-ago period’s levels.
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Rayonier (RYN) Completes the Oregon Timberland Divestiture
Rayonier Inc. (RYN - Free Report) completed the sale of 55,000 acres of timberland in Oregon to Manulife Investment Management for $242 million, approximately $4,400 per acre.
This transaction marks a significant milestone in RYN's asset disposition and capital structure realignment plan, aiming for $1 billion in select asset sales over 18 months, as announced on Nov 1.
The company utilized $150 million of the proceeds to reduce its only floating-rate debt. The company’s board of directors declared a one-time, special cash dividend of 20 cents per common share, payable on Jan 12, 2024, to shareholders of record on Dec 29, 2023. Approximately $30 million will be allocated for this special dividend. The remaining proceeds will be retained for additional debt reduction or other capital allocation purposes.
RYN is actively pursuing the sale of additional timberland assets to capitalize on the gap between public and private timberland values. This strategic effort is intended to position the balance sheet for a higher interest rate environment while simultaneously returning significant capital to shareholders.
Price Performance
Image Source: Zacks Investment Research
Shares of RYN fell 2% on Dec 18 during the after-hour trading session. The stock has gained 12.9% in the past three months compared with the Zacks Building Products - Wood industry’s growth of 11.2%. The company is well-positioned 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 in the past few years. This positions Rayonier to capitalize on the favorable trend, given that 73% of its Southern timberlands are located in the top quartile markets.
In November, the company announced its capital structure realignment plan, through which it targets disposing of select assets totaling $1 billion over the next 18 months. This will enhance shareholders’ value and credit ratios, providing scope for greater capital allocation flexibility and improving CAD per share. It aims to maintain net debt to adjusted EBITDA within 3.0X compared with 4.5X targeted earlier.
Zacks Rank & Key Picks
Rayonier currently sports a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Construction sector are:
EMCOR Group, Inc. (EME - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 25%, on average. Shares of EME have surged 47.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for EME’s 2023 sales and earnings per share (EPS) suggests growth of 12% and 52.8%, respectively, from the year-ago period’s levels.
M-tron Industries, Inc. (MPTI - Free Report) currently sports a Zacks Rank of 1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average. It has surged 252.3% in the past year.
The Zacks Consensus Estimate for MPTI’s 2023 sales and EPS indicates growth of 30.6% and 156.7%, respectively, from the previous year’s levels.
AECOM (ACM - Free Report) carries a Zacks Rank of #2 (Buy). It has a trailing four-quarter earnings surprise of 2.1%, on average. Shares of ACM have surged 11% in the past year.
The Zacks Consensus Estimate for ACM’s 2024 sales and EPS indicates an increase of 4.5% and 17.5%, respectively, from the year-ago period’s levels.