The acquisition of Plum Creek and the strong results of Farmland Partners have positioned both companies as the best-performing REIT stocks of the week. Once a neglected sector in 2015, timberland and farmland have quietly stolen the show in this next to the last month of the year.
The merger of Weyerhaeuser and Plum Creek (which became more of an acquisition of Plum Creek by Weyerhaeuser due to the ownership ratio between the companies) has benefitted Plum Creek shareholders, who will receive the same dividend rate as Weyerhaeuser shareholders--which represents a 13 percent bump in the dividend. Plum Creek shares spiked by 17 percent following the acquisition and slightly decreased for the remainder of the week. On the other hand, Weyerhaeuser shares dropped 4 percent last week and 19 percent year-to-date.
Farmland Partners released their third quarter results which showed a whopping 101 percent increase in their year-to-date Adjusted FFO per share. The company bought a large tract of land in Illinois which gives them a third increase in acreage. Following the announcements, Farmland shares went up by 6 percent.
These two REITs shine in a week where more than 85 percent of the REIT stocks pulled back. The 175 equity REITs we track have decreased by 2.6 percent, especially Regional Malls which as a whole have suffered more than others. Retailer results have been disappointing for companies such as J.C. Penney, Macy's, and Nordstrom. Rouse Properties and Macerich Co. dropped by more than 10 percent, mostly on Friday.
Weyerhaeuser (NYSE:WY); Plum Creek (NYSE:PCL); Farmland Partners Inc. (NYSE:FPI); Macerich Co. (NYSE:MAC); Rouse Properties (NYSE:RSE); Nordstrom Inc. (NYSE:JWN); Macy (NYSE:M); J.C. Penney Company Inc. (NYSE:JCP)
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Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.