Plum Creek Timber Co. (PCL) has a Zacks #2 Rank. Its stock trades at 28.6x 2010 consensus EPS estimates and 26.1x 2011 consensus EPS estimates.
Growth and Income
Analysts estimate that Plum Creek Timber will grow its EPS at 10% annually for the next 3 to 5 years. The stock also offers investors a fat dividend yield of 4.2%.
Company Description
Plum Creek Timber is a publicly owned real estate investment trust (REIT) that owns and manages timberlands in the U.S. Its products include lumber, plywood, medium density fiberboard, and related by-products, such as wood chips.
Recent Results
On February 1, Plum Creek announced first-quarter revenue of $258 million, down 44% from the fourth quarter of 2008. The REIT still managed to beat analyst expectations. PCL earned $0.19 per share, 3 cents ahead of the Zacks Consensus Estimate.
The company indicated that its business conditions stabilized in the second half of 2009, and it is seeing a modest recovery.
Plum Creek Timber is scheduled to report first-quarter results on April 26.
Analyst Estimates Inching Higher
In the last month, the Zacks Consensus Estimate for 2010 is up 2 cents, or 1.5%. The Zacks Consensus Estimate for 2011 increased 4 cents, or 2.7%. Analysts expect year-over-year EPS growth of 1.6% in 2010 and 8.9% in 2011.
Solid Financials
Despite the huge decline in sales, Plum Creek has been able to maintain a strong net profit margin of 18.2% and return on equity of 14.8%. In addition, the company’s dividend yield of 4.2% is well above the industry average of 0.2%.
The Chart
PCL shares sold-off about 10% during the February pullback, but they have rebounded smartly off those lows. On Monday, the stock hit a new 52-week intraday high of $40.18 before ending with a small loss for the day.
