Potlatch (PCH) and Texas Instruments (TXN): Growth & Income Stocks
Potlatch Corp (PCH) is a Real Estate Investment Trust (REIT) with approximately 1.4 million acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi. Potlatch, a certified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary.
There have been three big drivers behind Potlatch’s recent uptick and expected growth in 2018; housing starts, lumber prices, and a recent acquisition. As you can see in the graphs below, both timber prices, and building permits have been trending upwards over the past several months. But most importantly for the company are the elevated lumber prices.
As you can see in the chart below, the price of lumber has increased by almost just over 50% since the beginning of 2017.
Chart source: Markets Insider.
This surge in lumber prices has been moving in tandeum with U.S. building permits and to a lesser extent housing starts as you can see below.
The December data showed a dip in total housing starts, but December is typically a slower month due to poor weather conditions, and this month was no exception as the country saw record cold temperatures.
While the December data showed a 8.2% decline, the forward looking building permits data came in very strong, as you can see below.
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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
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