Comparing West Fraser Timber (WFTBF) and Weyerhaeuser (WY)

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

Dividends

Weyerhaeuser pays an annual dividend of $1.36 per share and has a dividend yield of 5.3%. 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 increased its dividend for 7 consecutive years.

Profitability

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

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for West Fraser Timber and Weyerhaeuser, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
West Fraser Timber 0 0 1 0 3.00
Weyerhaeuser 0 2 7 0 2.78

Weyerhaeuser has a consensus target price of $32.75, suggesting a potential upside of 28.13%. Given Weyerhaeuser’s higher possible upside, analysts clearly believe Weyerhaeuser is more favorable than West Fraser Timber.

Earnings and Valuation

This table compares West Fraser Timber and Weyerhaeuser’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
West Fraser Timber N/A N/A N/A N/A N/A
Weyerhaeuser $7.48 billion 2.55 $748.00 million $1.18 21.66

Weyerhaeuser has higher revenue and earnings than West Fraser Timber.

Institutional and Insider Ownership

76.6% of Weyerhaeuser shares are held by institutional investors. 0.4% of Weyerhaeuser shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

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

About West Fraser Timber

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.

About Weyerhaeuser

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.

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