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Weyerhaeuser Is Inflationary, Not Cyclical

May 02, 2022 3:45 PM ETWeyerhaeuser Company (WY)16 Comments
Edward Ambrose profile picture
Edward Ambrose


  • Earnings per share in the first quarter were $1.31, up 44% year over year. Wood Products which is lumber, plywood, and engineered wood were 82% of Adjusted EBITDA.
  • Wood Product volume was about the same, the growth was from higher prices.
  • The Wood Products go into residential construction and repair and remodeling with minor commercial construction.

Weyerhaeuser Acquires Plum Creek Timber In $8.4 Billion Deal

Stephen Brashear/Getty Images News

Weyerhaeuser Business

Weyerhaeuser is a very well-run company. They own 11 million acres of forestland in the United States and lease 14 million acres in Canada. The company boasts that it sells 95% of the timber it processes. The

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Edward Ambrose profile picture
I am not the typical analyst. I have unique skills, honed by years of successful Mergers and Acquisition accomplishments, to find beaten down stocks that have the potential for recovery and growth. These companies are helpful in balancing a portfolio as well as beating the market. This experience left with strong appreciation for fundamental analysis of a company’s businesses rather than the whole corporation, to find what will drive the results. ed.ambrose9@gmail.com 609 685 2290

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Comments (16)

fonx profile picture
According to the 10K 80% of the sales and 83% of the earnings come from Wood Products segment, and it looks to me, after checking the products in their site, that those ones seem to be used primarily in construction and repairs.

I wouldn´t be so sure it is not cyclical. I think it goes side by side with the building sector. It suffered very much 2008 crisis.
Damon Judd profile picture
Great article, and commodities are very good investments in general, and a tree company that owns land is a solid option for a long-term investment during inflationary times. If they pay more special dividends later this year, that will be the icing on the cake for me.
Thanks for the write-up and the concise overview. I don't have much commodity exposure, but I love WY. Its divvy policy should become the standard for all companies in fluctuating sectors.

The carbon storage business is going to become huge. This is the ground floor. (Sorry for the pun.)
Edward Ambrose profile picture
WY is a great company for those who want cash

ViewFar profile picture
Like the comments made by another user, the land owned will increase in value, look at other REITs such as LAND.
Edward Ambrose profile picture
The land is getting more valuable but most of it is not near paved roads.
ViewFar profile picture
@Edward Ambrose yes but looks like mgmt has a plan to start growing carbon sinks...
from the WY website:

For shareholders of Weyerhaeuser Company (NYSE: WY), the 2021 dividend distributions totaling
$1.18 per share on the Common Stock CUSIP 96216610 traded under the symbol WY are classified
for income tax purposes as Capital Gain Distributions which are treated as long-term capital gain. The
common share dividends were paid as follows: $0.17 on March 19, 2021; $0.17 on June 18, 2021;
$0.17 on September 17, 2021; $0.50 on October 19, 2021; and $0.17 on December 17, 2021.
2021 Dividend Tax Reporting Information (Form 1099-DIV)
Record Date Payable Date Cash
Distribution per
Capital Gain

long WY.
jbfiacco profile picture
Weyerhaeuser’s dividends are not tax free. The following is from their web site.

How are Weyerhaeuser’s dividends taxed?
Because the income generated by the sale of standing timber is generally considered capital gains, much of the income generated by Weyerhaeuser and distributed to shareholders is taxed at capital gains rates. Since Weyerhaeuser’s conversion to a REIT, our dividends have been taxed as long-term capital gains for most US stockholders.
CincinnatiRick profile picture
@jbfiacco Well, yes, not tax "free" but the cap gains do lay off against cap losses, if you manage your portfolio to net realize them.
Edward Ambrose profile picture
That is a good point
Non-GAAP Earnings profile picture
@jbfiacco It's not tax-free, but it is interesting that we have a REIT whose distributions are taxed basically as if they were qualified dividends, just like you would with a regular company like Apple. The thing is, though, if you check the 10-K Weyerhaeuser paid a lot of income taxes last year ($695 million in tax, on $3,316 million in pre-tax income). So they're not getting that benefit of being a REIT. There's a lot I don't understand about $WY.
toh192 profile picture
I can’t buy productive land less than 6k/acre.
WY & PCH can! Forget the wood business - it’s all backed up by extremely valuable land.
@toh192 I am a proud holder. Nothing is perfect but growing trees improves the environment. Some who will complain do not realize that lumber used for construction, paper etc is actually grown on a controlled forest. For those who know, you can see this at the lumber yard. Old growth wood is far slower growing, you can see the size of the rings-it is also harder and denser.
Edward Ambrose profile picture
"Buy land because their not making any more of it" Will Rogers
Edward Ambrose profile picture
This is true.
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