Plum Creek Timber Co. (NYSE: PCL) and Weyerhaeuser Company (NYSE:WY) are both mid-cap financials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitabiliy, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Institutional and Insider Ownership

77.4% of Weyerhaeuser Company shares are owned by institutional investors. 1.3% of Weyerhaeuser Company shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Weyerhaeuser Company pays an annual dividend of $1.24 per share and has a dividend yield of 3.7%. Plum Creek Timber Co. does not pay a dividend. Weyerhaeuser Company pays out 85.5% 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 Company has increased its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Plum Creek Timber Co. and Weyerhaeuser Company’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Plum Creek Timber Co. N/A N/A N/A N/A N/A
Weyerhaeuser Company $6.67 billion 3.74 $1.64 billion $1.45 22.86

Weyerhaeuser Company has higher revenue and earnings than Plum Creek Timber Co..

Analyst Recommendations

This is a summary of current ratings and recommmendations for Plum Creek Timber Co. and Weyerhaeuser Company, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plum Creek Timber Co. 0 0 0 0 N/A
Weyerhaeuser Company 1 3 5 1 2.60

Weyerhaeuser Company has a consensus price target of $36.38, suggesting a potential upside of 9.73%. Given Weyerhaeuser Company’s higher possible upside, analysts clearly believe Weyerhaeuser Company is more favorable than Plum Creek Timber Co..

Profitability

This table compares Plum Creek Timber Co. and Weyerhaeuser Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Plum Creek Timber Co. 10.53% 9.14% 2.73%
Weyerhaeuser Company 16.58% 6.22% 2.83%

Summary

Weyerhaeuser Company beats Plum Creek Timber Co. on 10 of the 13 factors compared between the two stocks.

About Plum Creek Timber Co.

Plum Creek Timber Company, Inc. (Plum Creek) is a private timberland owner in the United States. The Company operates through segments, including Northern Resources segment consists of timberlands in Maine, Michigan, Montana, New Hampshire, Oregon, Vermont, Washington, West Virginia and Wisconsin; Southern Resources segment consists of timberlands in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas, and Virginia; Energy and Natural Resources segment includes natural resource businesses that focus on opportunities for oil and natural gas production, construction aggregates and mineral extraction, wind power and communication and transportation rights of way; Real Estate segment consists of sales of higher value timberlands and non-strategic timberlands, and Other segment provides timber and wood-fiber procurement services. It owns approximately 6.6 million acres of timberlands located in over 19 states.

About Weyerhaeuser Company

Weyerhaeuser Company is a timber, land and forest products company. As of December 31, 2016, the Company owned or controlled 13.1 million acres of timberlands, primarily in the United States, and manages additional timberlands under long-term licenses in Canada. The Company’s segments include Timberlands; Real Estate, Energy and Natural Resources (Real Estate & ENR), and Wood Products. The Timberlands segment’s offerings include logs, timber and recreational access via leases. The Real Estate & ENR segment includes sales of timberlands; rights to explore for and extract hard minerals, oil and gas production, and coal, and equity interests in its Real Estate Development Ventures. The Wood Products segment includes the manufacturing and distribution of wood products. The Wood Products segment is engaged in softwood lumber, engineered wood products, structural panels, medium density fiberboard and building materials distribution.

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