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.
Bill Esler, Associate Publisher/ Editor in Chief, Woodworking Network Bill is responsible for editing Custom Woodworking Business and coordinating all content for Wood & Wood Products , CLOSETS , Woodworkingnetwork.com and Closetsdaily.com, along with related newsletters. Bill’s expertise includes using innovative print manufacturing techniques to grow audience engagement, using textured offset, digital printing, purls, QR codes; and lead-generating webcasts, custom websites, and custom digital and print content.
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