Boise Cascade (BCC): Taking Stock of Valuation Following Dividend Hike and Buyback Program

Boise Cascade (BCC) has just announced a 5% boost to its quarterly dividend, with investors set to benefit from the increased payout in mid-September. Alongside the higher dividend, the company confirmed it has been actively buying back its own shares. These moves typically signal confidence from management in Boise Cascade’s long-term prospects. For current and potential shareholders, this kind of dual announcement often sparks a fresh look at whether the stock is worth holding or picking up right now.

So, how has the market responded? Over the past year, Boise Cascade’s share price has drifted lower, dropping about 30%, even as recent momentum picked up a bit with modest gains this month. While last year’s performance might give some pause, the company’s longer-term numbers still stand out, with shares up more than 170% over the last five years and both revenue and net income trending in the right direction. The combination of a dividend hike and ongoing buybacks suggests Boise Cascade is leaning into its strengths while rewarding loyal investors, even if Wall Street has not fully embraced the story just yet.

But with the annual decline in share price and these new shareholder-friendly moves, is Boise Cascade undervalued right now, or are investors simply pricing in slower future growth ahead?

Most Popular Narrative: 12% Undervalued

According to community narrative, Boise Cascade is currently being valued roughly 12% below what analysts consider its fair value, with projections based on disciplined management and potential future growth.

Ongoing investments in production modernization (for example, completion of the Oakdale mill and the upcoming Thorsby line) are expected to enhance operational efficiency and output flexibility. This supports higher margins and earnings through lower operating costs and improved asset utilization.

Why are analysts anticipating double-digit upside for Boise Cascade? The answer lies in a strategic mix of modernization, expansion, and management’s firm grip on capital allocation. The narrative points to bold targets and ambitious quantitative projections for both revenue and earnings growth. Curious about the financial blueprint these analysts believe will power the next chapter? Discover the foundational drivers behind the current price target, because this is where the story gets interesting.

Result: Fair Value of $103.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent pricing pressures and weaker residential construction demand could challenge Boise Cascade's growth story and dampen its margin momentum going forward.

Find out about the key risks to this Boise Cascade narrative.

Another View: Discounted Cash Flow Model Disagrees

While analysts see Boise Cascade as undervalued, our DCF model reaches a very different conclusion and suggests the shares are not as cheap as they look. Can this clash of valuations be resolved by future results?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Boise Cascade for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Boise Cascade Narrative

If you see things differently or want to dive deeper into the numbers yourself, you can put together your own story about Boise Cascade in just a few minutes. do it your way.

A great starting point for your Boise Cascade research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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