Weyerhaeuser Co's Dividend Analysis
Insights into Weyerhaeuser Co's Upcoming Dividend Payment and Financial Health
Weyerhaeuser Co (NYSE:WY) recently announced a dividend of $0.2 per share, payable on 2024-03-22, with the ex-dividend date set for 2024-03-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Weyerhaeuser Co's dividend performance and assess its sustainability.
What Does Weyerhaeuser Co Do?
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Weyerhaeuser ranks among the world's largest forest product companies. Following the 2016 sale of its pulp business to International Paper, Weyerhaeuser operates three business segments: timberlands, wood products, and real estate. Weyerhaeuser is structured as a real estate investment trust and is not required to pay federal income taxes on earnings generated by timber harvest activities. Earnings from its wood products segment are subject to federal income tax. Weyerhaeuser acquired fellow timber REIT Plum Creek in 2016.
A Glimpse at Weyerhaeuser Co's Dividend History
Weyerhaeuser Co has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Weyerhaeuser Co's Dividend Yield and Growth
As of today, Weyerhaeuser Co currently has a 12-month trailing dividend yield of 2.31% and a 12-month forward dividend yield of 2.41%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Weyerhaeuser Co's annual dividend growth rate was 14.20%. Extended to a five-year horizon, this rate decreased to -10.40% per year. And over the past decade, Weyerhaeuser Co's annual dividends per share growth rate stands at -3.10%.
Based on Weyerhaeuser Co's dividend yield and five-year growth rate, the 5-year yield on cost of Weyerhaeuser Co stock as of today is approximately 1.33%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Weyerhaeuser Co's dividend payout ratio is 0.75, which may suggest that the company's dividend may not be sustainable.
Weyerhaeuser Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Weyerhaeuser Co's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Weyerhaeuser Co's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Weyerhaeuser Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Weyerhaeuser Co's revenue has increased by approximately 1.30% per year on average, a rate that outperforms approximately 51.48% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Weyerhaeuser Co's earnings increased by approximately -7.50% per year on average, a rate that outperforms approximately 33.46% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 22.50%, which outperforms approximately 87.89% of global competitors.
Next Steps
Considering Weyerhaeuser Co's consistent dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors have much to ponder. The company's strong profitability rank and growth trajectory paint a promising picture for the future, but the negative five-year dividend growth rate and payout ratio raise questions about the long-term sustainability of its dividend payments. Will Weyerhaeuser Co continue to provide value to its shareholders through dividends, or will adjustments be necessary to maintain financial health? Only time will tell, but for now, Weyerhaeuser Co remains a noteworthy consideration for dividend-seeking investors.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
