|
What do investers think about owning timber stocks for long term, such as PCL, andRYN?
Asked by: bosshawg503 at about 1 year ago | bosshawg503's Q&A 
|
|
|
Timber is an asset class in the stock market. From 1973 to 2002, managed timber returned roughly 15% annually as an investment, while stocks returned about 11%. In today's rising inflationary environment, the price of timber has consistently beaten inflation, so I think timber investment is a good inflation hedge. Over the last century timber prices have risen at 3.3% above the rate of inflation. Add 5% a year in income, and you've got a timber investment asset that has returned double digits, competing with stocks over the long run. PCL has about eight million acres of timberland under management and it has a $6.5B market cap and pays a dividend of 4.5%. Whereas RYN has about 2.4M acres of timberland in the United States, Australia and New Zealand. It also has the added benefit of a diversified a performance fiber unit, these fibers are used in tires, rayon yarns, paints, ink and even diapers. RYN had a great run in 2006 hitting $47.50 but is down almost 20% at $36.85 and yields a attractive 5%.
- They are high income yielding companies.
- They own a tangible asset in timber.
- They are proven inflation hedge, as I already explained earlier.
I think they are the long term keepers.
Answered by: liz at about 1 year ago | liz's Q&A Rate this: 
 | Votes: 0
|
|
Back