By Rob Otman
Weyerhaeuser (NYSE: WY) is a large cap company that operates within the REIT industry. Its market cap is $27 billion today, and the total one-year return is 15.92% for shareholders.
Weyerhaeuser stock is underperforming the market. It’s beaten down, but it reports earnings next week. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Weyerhaeuser reported a recent EPS growth rate of -81.25%. That’s below the REIT industry average of -13.39%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the REIT industry is 42.09. And Weyerhaeuser’s ratio comes in at 40.8. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Weyerhaeuser stock is 78.27%. That’s below the REIT industry average of 92.04%. The company is less leveraged.
✓ Free Cash Flow per Share Growth: Weyerhaeuser’s FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✗ Profit Margins: The profit margin of Weyerhaeuser comes in at 1.33% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Weyerhaeuser’s profit margin is below the REIT average of 63.32%. So that’s a negative indicator for investors.
✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Weyerhaeuser is 10.75%, and that’s above its industry average ROE of 10.36%.
Weyerhaeuser stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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