Daily Stock Pick: Weyerhaeuser

A portfolio of stocks I've been building since September 3 is named Volio Folio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

Today I'm reviewing the third of five materials stocks striving to be picked to join my Volio folio. This could be the twelfth pick for Volio!

That materials sector has thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; gold; paper; silver; specialty chemicals; steel.

My subject today is a large-cap forest product company named, Weyerhaeuser Co Their trading ticker symbol is WY. My most recent report on Weyerhaeuser Co was August 13 when I reviewed it and selected it that week for my IVY folio.

Weyerhaeuser ranks among the world's largest forest product companies.

Following the 2016 sale of its pulp business to International Paper, Weyerhaeuser operates three business segments: timberlands, wood products, and real estate.

Weyerhaeuser is structured as a real estate investment trust and is not required to pay federal income taxes on earnings generated by timber harvest activities.

Earnings from its wood products segment are subject to federal income tax. Weyerhaeuser acquired fellow timber REIT Plum Creek in 2016.

Weyerhaeuser Company began operations in 1900  and is based in Seattle WA.

I use three key data points to gauge dividend-paying equities or funds like Weyerhaeuser Co:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.

Those three basic keys, however, best tell whether a company has made, is making, and will make money.

WY Price

Weyerhaeuser's price per share closed at $29.71 yesterday. A year ago its price was $26.55. So, in the past year, its price increased by $3.16 or almost 12%.

Assuming Weyerhaeuser's stock trades in a range of $25 to $35 this next year, it's recent $29.71 price could rise by $2.29 and might hit $32.00 by mid-November, 2020, assuming upward price momentum continues.

WY Dividends

Weyerhaeuser's latest declared quarterly dividend was $0.34, payable December 20th.

That $0.34 Q dividend equates to $1.36 annually and yields 4.58% based on yesterday's $29.71 closing price.

WY Gains?

Adding the $1.36 annual estimated dividend to my $2.29 estimate of Weyerhaeuser's price upside shows a $3.65 potential gross gain, per share, which will be reduced by any costs to trade these shares.

Say, for costs, we put a little over $1,000.00 today into Weyerhaeuser at its recent $29.71 price, we'd buy 34 shares of WY.

A $10 broker fee paid half at purchase and half at sale could cost us about $0.29 per share.

Subtract that $0.29 brokerage cost from the estimated $3.65 gross estimated gain per share leaves a net gain of $3.36 X 34 shares = $114.24 or an 11.3 % net gain on a $1,010.14 investment.

Therefore, Weyerhaeuser Co, whose trading ticker symbol is WY shows a possible 11.3% net gain including a 4.58% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to learn if Weyerhaeuser Co is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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