Jim Cramer - Mad Money
Weyerhaeuser Co
WY-N
RISKY
Jul 10, 2024
Lumber is a boom and bust industry and lumber prices and stocks are slumping. WY is cleaning up its balance sheet and growing its 2.9% dividend. They also have issued special dividends. They have a long-term plan, so you're good to ride out near-term choppiness holding this. But don't buy before they report on July 25, because numbers may not be good. Wait till after, though that can be risky too. A tailwind would be lower interest rates, because they would stimulate home-buying and home-building, which needs lumber.
A way to play interest rates. Huge, number one in lumber, owning 12 million acres of land across North America. Low interest rates and low unemployment drive their lumbers sales (more house sales). It comes down to the American consumer. There are better ways to play interest rates--bonds. WY is interesting, but he won't buy it.
WY-N vs. IFP-T. WY-N often looks the most expensive at the bottom of the cycle. It does not have great momentum. It beat on the recent quarter. Its balance sheet is okay. He would prefer this to, for example, IFP-T. He would not buy either until earnings come in.
A major supplier of forest products. It's up 20% YTD including dividend. They reported a strong quarter last week. It's been stable despite volatile lumber prices. Lumber isn't their only business. It comes down to the housing market. If you think housing will thrive, then buy WY.
Are doing very well because of sky-high lumber prices. It hit a 52-week high today after releasing a very good quarter. Their REIT owes vast swathes of timberland and are a major maker of wood products in North America. Since last fall, they have paid two special dividends.
Yesterday they reported a mixed quarter: missed sales and cash flow, but beat earnings and announced a supplemental dividend. Pays a 4.7% dividend yield. If the FEd can navigate a soft landing, then the wood business can thrive, but will suffer otherwise.
Is down only 2% in the last 3 days when the markets have tanked much worse. The Fed will cut interest rates, which benefits WY. Adjusted EBITDA rose 16% in Q2 over previous quarter.
Lumber is a boom and bust industry and lumber prices and stocks are slumping. WY is cleaning up its balance sheet and growing its 2.9% dividend. They also have issued special dividends. They have a long-term plan, so you're good to ride out near-term choppiness holding this. But don't buy before they report on July 25, because numbers may not be good. Wait till after, though that can be risky too. A tailwind would be lower interest rates, because they would stimulate home-buying and home-building, which needs lumber.