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By David Berman

Moody's Investors Service (NYSE:MCO) on Tuesday had some kind words for Plum Creek Timber Co. Inc. (NYSE:PCL). While the depressed U.S. housing market hasn’t been kind to the timber market in recent years, Plum Creek in particular has a few things going for it – notably, it stayed profitable through the bad days by jettisoning some land, and is now well positioned to benefit from at least three factors.

“Near term, the firm will enjoy greater incremental demand from Asia; longer term, we expect housing starts to triple today's annual rate, and with lower harvest volume from pine beetle-damaged forests in Western Canada, there is further potential for Plum Creek to benefit,” Moody’s said in a note, in which it upgraded the company’s credit rating by one notch, to Baa2.

Unfortunately, Plum Creek’s share price already reflects considerable optimism. Though unchanged on Tuesday afternoon, the shares have risen 17.6 per cent so far in 2011, and are close to their 52-week high, touched on Friday. Longer term, the shares are up nearly 50 per cent over the past five years after factoring in dividends.

Still, Plum Creek has a few things going for it for longer-term investors. For what it’s worth, the share price is still below its pre-financial crisis high point. The dividend, which hasn’t been raised since 2007, yields an attractive 3.8 per cent. And analysts have yet to pound the table on the stock: According to Bloomberg, most analysts following the stock recommend it as a “hold,” while the rest are split between “sell” recommendations and “buys.” As timber plays go, this one is definitely worth a look.

Disclosures: None

Source: Plum Creek Timber Harvesting a Solid Future