Financial Analysis: Weyerhaeuser (NYSE:WY) vs. West Fraser Timber (WFTBF)

Weyerhaeuser (NYSE:WY) and West Fraser Timber (OTCMKTS:WFTBF) are both construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Valuation and Earnings

This table compares Weyerhaeuser and West Fraser Timber’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Weyerhaeuser $7.48 billion 2.70 $748.00 million $1.18 22.95
West Fraser Timber N/A N/A N/A N/A N/A

Weyerhaeuser has higher revenue and earnings than West Fraser Timber.

Institutional & Insider Ownership

77.8% of Weyerhaeuser shares are owned by institutional investors. 0.4% of Weyerhaeuser shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Weyerhaeuser and West Fraser Timber’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weyerhaeuser 10.01% 9.80% 5.05%
West Fraser Timber N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Weyerhaeuser and West Fraser Timber, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weyerhaeuser 0 2 8 0 2.80
West Fraser Timber 0 0 1 0 3.00

Weyerhaeuser currently has a consensus price target of $32.67, suggesting a potential upside of 20.63%. Given Weyerhaeuser’s higher probable upside, analysts clearly believe Weyerhaeuser is more favorable than West Fraser Timber.

Dividends

Weyerhaeuser pays an annual dividend of $1.36 per share and has a dividend yield of 5.0%. West Fraser Timber does not pay a dividend. Weyerhaeuser pays out 115.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Weyerhaeuser has raised its dividend for 7 consecutive years.

Summary

Weyerhaeuser beats West Fraser Timber on 10 of the 12 factors compared between the two stocks.

Weyerhaeuser Company Profile

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control 12.2 million acres of timberlands in the U.S., and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products. Our company is a real estate investment trust. In 2018, we generated $7.5 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America Index. Our common stock trades on the New York Stock Exchange under the symbol WY.

West Fraser Timber Company Profile

West Fraser Timber Co. Ltd. produces and sells lumber, panels, and pulp and paper in western Canada and the southern United States. The company offers spruce-pine-fir and southern yellow pine lumber, as well as newsprint, wood chips, and other residuals and energy products. It also provides treated wood, medium density fiberboard panels, laminated veneer lumber panels, and plywood; northern bleached softwood Kraft pulp used to produce various paper products, including printing and writing papers, specialty grades, and various tissue products; and bleached chemical thermo-mechanical pulp that is used to produce coated board grades, printing and writing paper, and paper towel/napkin grades, as well as specialty papers and tissue grades. The company was founded in 1955 and is based in Vancouver, Canada.

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