NEW YORK, NY - Depressed demand as a result of weak housing starts has plagued the timber industry over the last few years. However, the housing market appears to have bottomed out and a rebound period may be underway.

SignalWatcher.com says its analysis of Weyerhaeuser Co., Louisiana-Pacific Corp. and other companies within the lumber industry distinguishes how lumber companies will perform in the near term. 

Weyerhaeuser Co. has performed very well over the last 6 months but does offer a lower dividend yield than some of its peers. Companies like Louisiana-Pacific Corp. may offer more upside in the long-term if the housing market picks up. 

Rising commodity costs stemming from inflation will affect nearly all types of companies though. Rising timber prices could be a major concern if demand continues to stagnate and producers are unable to pass along higher costs to consumers.

Overall, there are a variety of interesting ways to play the timber industry at this time. REITs may be the safe play but traditional lumber producers offer a lot of upside but with potentially more risk.