Barron's sees downside for Plum Creek Timber

|About: Plum Creek Timber Company, ... (PCL)|By:, SA News Editor

"It's the only timber REIT not earning its payout," Sandra Ward writes, adding that Plum Creek Timber's (PCL) "generous dividend ... amounts to about 130% of earnings."

At 30X earnings, PCL looks expensive, something Barron's says may be "the reward for stewarding its capital and managing the business well."

Nevertheless, the article says investors "worry about quality of [the dividend] coverage."

With PCL leaning on real-estate sales to raise money, the company "is at a disadvantage in that its landholdings are considered less valuable than rivals," Ward notes, adding that "creative" royalty and rights arrangements generate cash that "isn't considered of the same quality as that produced by operations."