Weyerhaeuser Hikes Quarterly Dividend Rate By 3.2%

Weyerhaeuser Company (WY – Free Report) yesterday announced a 3.2% increase in its quarterly dividend rate. Notably, the news came in shortly after the company’s third-quarter 2017 earnings release on Oct 27.

Such disbursements reflect the company’s strong cash position and its commitment toward rewarding its shareholders handsomely. In the long run, it aims to achieve dividend payout of up to 75% of funds available for distribution.

In the last month, shares of this wood products company have yielded 5.5% return, outperforming the gain of 4.4% recorded by the industry.

Inside the Headline

As revealed, the dividend increase from 31 cents to 32 cents was approved by Weyerhaeuser’s board of directors. On an annualized basis, the dividend increased to $1.28 from $1.24 per share.

Weyerhaeuser will pay the revised dividend on Dec 15, 2017, to shareholders on record as of Dec 1.

In the last five years (2012-2016), the company’s annual dividend rate has increased from 62 cents to $1.24 per share, increasing roughly four times within this period. The latest increase of 3.2% in the annual dividend rate is the company’s fifth hike since 2012.

We believe that the rise in Weyerhaeuser’s profitability and a strong cash position will enable it to return higher value to its shareholders in the years ahead. Notably, the company’s earnings surged 40% year over year in the first nine months of 2017. Dividend paid during the period totaled $699 million. Cash position was healthy, with roughly $847 million net cash generated from its operating activities. Cash and cash equivalents exiting the period was $497 million.

Over the last 30 days, the Zacks Consensus for the stock has increased 11.4% to $1.17 for 2017 and 4.8% to $1.30 for 2018. These estimates reflect year-over-year growth of 56.3% for 2017 and 10.9% for 2018.

Weyerhaeuser Company Price and Consensus