U.S. Markets closed

How Does Plum Creek Timber Compare to Its Peers?

Gabriel Kane

US Equity Market Update as of October 26, 2015

(Continued from Prior Part)

Plum Creek Timber and its peers

In this article, we’ll compare Plum Creek Timber (PCL) to its peers.

  • The PE (price-to-earnings) ratios of Plum Creek Timber, Weyerhaeuser (WY), Rayonier (RYN), and Potlatch Corporation (PCH) are 37.42x, 26.86x, 51.45x, and 20.08x, respectively.
  • The PBV (price-to-book value) ratios of Plum Creek Timber, Weyerhaeuser, Rayonier, Louisiana-Pacific (LPX), and Potlatch are 4.67x, 3.08x, 2.04x, 2.39x, and 5.83x, respectively.

  • The PS (price-to-sales) ratios of Plum Creek Timber, Weyerhaeuser, Rayonier, Louisiana-Pacific, and Potlatch are 4.72x, 2.08x, 5.15x, 1.31x, and 2.03x, respectively.

Thus, the company has outperformed its peers based on PE, PBV, and PS.

ETFs that invest in Plum Creek Timber

The iShares Global Timber & Forestry ETF (WOOD) invests 7.8% of its holdings in Plum Creek Timber. The ETF tracks the 25 largest publicly listed companies that own or manage forests and timberland.

The Guggenheim Timber ETF (CUT) invests 4.0% of its holdings in Plum Creek Timber. The ETF tracks the Beacon Global Timber Index, an index that uses a multifactor selection process to identify global timber stocks with the greatest risk-to-return potential.

The PowerShares S&P 500 High Dividend Low Volatility ETF (SPHD) invests 2.1% of its holdings in Plum Creek Timber. The ETF tracks a dividend-yield–weighted index comprising the 50 least-volatile names chosen from a shortlist of the S&P 500’s 75 highest–dividend-yielding securities.

Plum Creek Timber and its ETFs

Now let’s look at a comparison of Plum Creek Timber and the ETFs that invest in it:

  • The year-to-date price movements of Plum Creek Timber, WOOD, CUT, and SPHD are -1.7%, -6.5%, 1.8%, and 4.8%, respectively.
  • The PE (price-to-earnings) ratios of Plum Creek Timber, WOOD, CUT, and SPHD are 37.42x, 23.61x, 18.50x, and 20.05x, respectively.
  • The PBV (price-to-book value) ratios of Plum Creek Timber, WOOD, CUT, and SPHD are 4.67x, 1.70x, 1.52x, and 2.23x, respectively.

According to the above findings, ETFs have outperformed the company based on price movement. However, the company is far ahead of its ETFs based on PE and PBV.

Continue to Next Part

Browse this series on Market Realist: