Planting Dividend Seeds With Timber REITs

Continuing our timber REIT search is Potlatch Corporation (PCH). Potlatch Corporation owns and manages timberlands located in Arkansas, Idaho, Minnesota and Wisconsin. Headquartered in Spokane, Washington and producing primarily lumber, plywood, and particleboard for the homebuilding industry, PCH also leases land for hunting and other recreational activities. PCH is currently yielding 3.40% with a PE of 22.86.

P/E: 22.86
Yield: 3.40%
Profit margin: 12.48% ttm*
EPS 10 year average growth: -0.23%

For those looking for some adventure in the timber REIT space you might want to welcome relative newcomer CatchMark Timber Trust, Inc. (CTT). In general, I do not like to focus on micro-cap stocks ($476.65M) for long term dividend investing as I find these smaller entities less stable than their larger brethren. Nevertheless, a few figures for those brave dividend investors.

P/E: N/A (forward PE 33.64)
Yield: 3.70%
Profit margin: -25.94% ttm*
EPS 10 year average growth: N/A

Finally, in the timber space, though not a REIT but still a major player in the lumber and wood production space is Weyerhaeuser Co. (WY). Headquartered in Federal Way, Washington, WY manages and owns licenses to forestland for the production of lumber, home building products, pulp and paper. WY is currently yielding a decent 2.80% with a PE of 32.89.

P/E: 32.89
Yield: 2.80%
Profit margin: 8.21% ttm*
EPS 10 year average growth: 7.46%

Clearly, there are many choices when deciding to invest in the lumber and wood production sector. The popularity of REITs, in general, in many dividend growth portfolios suggests that these financial instruments deserve a place in various income producing portfolios. Using the figures above as a starting point for more research shows that Rayonier Inc. (NYSE: RYN) might hold that sweet spot for many dividend investors as it sports the lowest PE of the bunch along with the highest yield and ten year average EPS growth rate.

Do you hold any timber REITs in your dividend portfolio? Let me know below.

View single page >> |

Disclosure: NONE

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.