While it’s true that timberlands can be a good investment category
over time (if bought and managed properly), it doesn’t automatically
follow that timber REITs are a can’t-miss investment opportunity, as the
market has frequently assigned robust multiples to these businesses. In
the case of Rayonier (NYSE:RYN), for instance, an investor who bought the shares on the day after the spinoff of Rayonier Advanced Materials (RYAM) and reinvested the distributions would have an annualized return of around 3.5%, while an investment in Weyerhaeuser (WY) would have returned around 3.4%, and PotlatchDeltic (PCH) would have returned around 6.7%. Still,
for almost any going concern, there’s a price where it makes sense to
consider (or reconsider) the investment case. I don’t think Rayonier is
quite there today, but were the shares of this timber REIT to sell off
on weaker near-term results due to the temporary
downturn in U.S. housing, it’s a name I’d certainly consider,
particularly for investors who want some resource/commodity exposure.
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Housing Turbulence Could Open A Window Of Opportunity With Rayonier
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