Weyerhaeuser (NYSE:WY – Get Free Report) and West Fraser Timber (NYSE:WFG – Get Free Report) are both construction companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
83.0% of Weyerhaeuser shares are held by institutional investors. Comparatively, 40.2% of West Fraser Timber shares are held by institutional investors. 0.3% of Weyerhaeuser shares are held by insiders. Comparatively, 1.8% of West Fraser Timber shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Weyerhaeuser and West Fraser Timber, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Weyerhaeuser | 1 | 2 | 6 | 1 | 2.70 |
| West Fraser Timber | 0 | 0 | 5 | 0 | 3.00 |
Earnings and Valuation
This table compares Weyerhaeuser and West Fraser Timber”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Weyerhaeuser | $7.12 billion | 2.69 | $396.00 million | $0.50 | 52.79 |
| West Fraser Timber | $6.17 billion | 0.94 | -$5.00 million | ($0.17) | -444.71 |
Weyerhaeuser has higher revenue and earnings than West Fraser Timber. West Fraser Timber is trading at a lower price-to-earnings ratio than Weyerhaeuser, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Weyerhaeuser and West Fraser Timber’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Weyerhaeuser | 5.15% | 3.59% | 2.12% |
| West Fraser Timber | 0.03% | 0.99% | 0.78% |
Risk and Volatility
Weyerhaeuser has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, West Fraser Timber has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.
Dividends
Weyerhaeuser pays an annual dividend of $0.84 per share and has a dividend yield of 3.2%. West Fraser Timber pays an annual dividend of $1.28 per share and has a dividend yield of 1.7%. Weyerhaeuser pays out 168.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. West Fraser Timber pays out -752.9% of its earnings in the form of a dividend. Weyerhaeuser has increased its dividend for 3 consecutive years and West Fraser Timber has increased its dividend for 3 consecutive years.
Summary
Weyerhaeuser beats West Fraser Timber on 12 of the 17 factors compared between the two stocks.
About Weyerhaeuser
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 11 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 in North America. Our company is a real estate investment trust. In 2022, we generated $10.2 billion in net sales and employed approximately 9,200 people who serve customers worldwide. Our common stock trades on the New York Stock Exchange under the symbol WY.
About West Fraser Timber
West Fraser Timber Co. Ltd., a diversified wood products company, engages in manufacturing, selling, marketing, and distributing lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals and renewable energy. It offers spruce-pine-fir, douglas fir-larch, hem-fir, and southern yellow pine lumber, treated wood products, medium density fiberboard panels and plywood, oriented strand board, and laminated veneer lumber wood products, as well as particleboards. The company also provides northern bleached softwood Kraft pulp and bleached chemical thermo-mechanical pulp used to produce various paper products, including printing and writing papers, paperboard products, tissue and towel products, and a variety of other paper grades. Further, it offers bioproducts, including bioenergy and biomaterial. Its products are used in home construction, repair and remodeling, papers, tissue, and box materials, and industrial applications. The company sells its products to major retail chains, contractor supply yards, and wholesalers, as well as industrial customers for further processing or as components for other products in Canada, the United States, the United Kingdom, Europe, and internationally. West Fraser Timber Co. Ltd. was founded in 1955 and is headquartered in Vancouver, Canada.
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