Must read: Warren Buffett's 25 Favorite Stocks
TheStreet Ratings Team has this to say about their recommendation:
"We rate WEYERHAEUSER CO (WY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, compelling growth in net income, revenue growth and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- WEYERHAEUSER CO has improved earnings per share by 19.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WEYERHAEUSER CO increased its bottom line by earning $0.95 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $0.95).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income increased by 34.7% when compared to the same quarter one year prior, rising from $144.00 million to $194.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 278.68% to $109.00 million when compared to the same quarter last year. In addition, WEYERHAEUSER CO has also vastly surpassed the industry average cash flow growth rate of 30.73%.
- You can view the full analysis from the report here: WY Ratings Report