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Weyerhaeuser: Potential Earnings Trough In 2023

Mar. 02, 2023 3:04 PM ETWeyerhaeuser Company (WY)6 Comments
Ivo Kolchev profile picture
Ivo Kolchev


  • Sales for Weyerhaeuser were down 0.2% Y/Y in 2022, with adjusted EBITDA, diluted EPS before special items and adjusted Funds Available for Distribution all down 10-11% Y/Y.
  • Lumber futures have erased COVID-19 gains and are back to 2019 levels.
  • 2023 should be a trough year for the company due to weakness in the Wood Products segment, with 5.5% growth in fee harvest volume expected.
  • WY has a very conservative capital structure, with net debt of just $3.5 billion and a market cap of $23.2 billion. Its 10-year bonds are also very appealing, with a yield of 6.5%.
  • Growing alternative uses of wood and a Natural Climate Solutions business could boost earnings post-2023.

Container truck along a scenic road through the Canadian Rockies


Company Overview

As outlined in the company's 2022 Annual report:

Weyerhaeuser Company (NYSE:WY) is one of the world's largest private owners of timberlands. We own or control 10.6 million acres of timberlands in the U.S. and manage an additional 14.1

This article was written by

Ivo Kolchev profile picture
I ventured into investing in high school in 2011, mainly in REITs, preferred stocks, high yield bonds. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view. Currently I mostly write articles for various websites. Previously I have worked as a data analyst at Dynamo Software serving clients in the asset management industry, at the Bulgarian stock exchange cash market operations desk using the T7 trading system, as an analyst/portfolio manager focused on Western Europe, as well as a junior accountant for special purpose vehicles issuing CLOs & CDOs . I just started a PhD in Finance (topic is valuation of banks, REITs, insurance companies and asset managers) and have passed the Level 3 of the CFA exam.- Disclosure: I am not a financial adviser. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

rudz profile picture
24 Mar. 2023
How do I find the companies bonds?
Ivo Kolchev profile picture
@rudz here's the link where you can track the price www.boerse-frankfurt.de/... :)
wildpitcher profile picture
Adding to their dividend policy as you described it:

The quarterly dividend is paid for by cash flows from Timerlands and Real Estate. The planned "5th dividend" in the first quarter of each year is funded by Wood Products cash flows. The 5th dividend can exceed the other four combined.

Long WY for the long term.

Ivo Kolchev profile picture
@wildpitcher thanks Dave😁👍yes the basic quarterly dividend is very well covered and is set to grow 5% annually through 2025👍
Thanks for the detailed update.
Ivo Kolchev profile picture
@tjb314159 thanks glad you liked it😁
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