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PCH

PotlatchDeltic NasdaqGS:PCH Stock Report

Last Price

US$40.73

Market Cap

US$3.3b

7D

-2.5%

1Y

-24.0%

Updated

28 Sep, 2022

Data

Company Financials +
PCH fundamental analysis
Snowflake Score
Valuation6/6
Future Growth0/6
Past Performance3/6
Financial Health5/6
Dividends5/6

PCH Stock Overview

PotlatchDeltic (NASDAQ:PCH) is a leading Real Estate Investment Trust (REIT) that owns 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi.

PotlatchDeltic Competitors

Price History & Performance

Summary of all time highs, changes and price drops for PotlatchDeltic
Historical stock prices
Current Share PriceUS$40.73
52 Week HighUS$61.51
52 Week LowUS$39.10
Beta1.15
1 Month Change-11.99%
3 Month Change-7.83%
1 Year Change-23.98%
3 Year Change0.47%
5 Year Change-20.91%
Change since IPO6.48%

Recent News & Updates

Sep 16

Potlatch goes ex-dividend on Monday

Potlatch (NASDAQ:PCH) had declared $0.44/share quarterly dividend, in line with previous. Payable Sept. 30; for shareholders of record Sept. 20; ex-div Sept. 19. See PCH Dividend Scorecard, Yield Chart, & Dividend Growth.

Sep 06

PotlatchDeltic: External And Internal Challenges On The Horizon

Summary External trends are against the company while the management has to consolidate the newly acquired CatchMark Timber. Sawmill and labor costs are rising, energy prices and transportation costs are also on the rise, and at the same time, the housing market is slowing down. PotlatchDeltic is fairly valued at the moment and part of these challenges are already priced in but there might be another 5-10% price drop over the next few months. Investment thesis Timberland and wood production REITs could be a great way to hedge against inflation as the land holdings steadily appreciate over time. However, the appreciation will be likely slower in the next year than the actual CPI numbers and it will only catch up later. PotlatchDeltic Corporation (PCH) could be one of the choices for timberland REIT investors; however, the next 12-15 months are not going to be easy for the company. I believe that there is a lot of value underneath the surface and over the long term PCH is a good choice but I am currently neutral on the stock. It is because the valuation is fair maybe a bit above fair, I cannot see the shareholder-friendly CAD outcome of the recent merger yet and the external trends are against the company in the short term. Business Model PCH is a major timberland real estate investment company that owns more than 1.8 million acres of land at the moment before the completion of the CatchMark Timber Trust Inc. (CTT) acquisition. The company also operates sawmills to capitalize on the higher profit margin of lumber. The company works with great net profit margins which grew in the last 2-3 years. PCH’s revenue comes from 3 major sources. Approximately four-tenths of the company’s income comes from timberland itself, real estate, and land sales but the lion’s share comes from wood products. The chart is created by the author. All the figures are from the company's financial statements. External trends To have a better understanding of PCH and its future we need to have a look at the external timberland and lumber trends. What can we expect in the next 12-15 months? The past 2 years were great for timberland companies especially due to elevated lumber prices and because of high housing demand. The new “normal” won’t be that simple: timber and lumber prices are at 52-week lows and there is a reason behind that. The housing market is gradually slowing down, new construction projects are battling supply chain issues and high labor costs which causes less demand for lumber. This is likely to remain for the rest of 2022 and possibly for the first half of 2023 as well. markets.businessinsider.com At the same time, sawmill costs are also rising which will hurt Potlatch’s CAD in the next 12 months. A tight supply of labor and inflation is likely to push labor costs up by 5-10% in 2022 and in addition, energy prices could remain elevated. Power is used to represent 2% of sawmills’ turnover. This could rise by 2%, 3%, or even 5% depending on the deal PCH mills could strike with providers. This means the overall cost structure might change and the energy costs could surpass labor costs. In addition, the elevated costs combined with lower demand and lower lumber prices mean less cash coming into PCH. This situation is combined with a very overvalued acquisition of CatchMark. This might look scary for PCH investors but the good news is that the company is stable and still a good choice for the longer term. Next year is not going to be great for the company, but after the consolidation of the newly acquired timber company and the renewal demand of the housing market will play in their hand in the long term. Lumber prices might seem low at the moment but investors need to know that these prices are very hectic. It is not uncommon that within 2-3 months’ prices jump or fall by 30-40%. Analysts indicate that lumber prices will be between $550 - $1500 in the next 12 months which is good news for PCH. Valuation Taking into consideration all of the above-mentioned trends, the CatchMark merger, and PCH’s current valuation we can safely say that the company is anything but cheap despite the -22% drop year-to-date. Short interest of 1.16% went up to almost 5% by the end of August 2022 which suggests large hedge funds also see the risks associated with PCH in the short term. Unfortunately, the dividend yield is not good enough for income investors just yet, but above 4-4.2% I would buy the stock for income purposes. However, PCH still has the highest forward dividend yield among its peers but the valuation is fair or even a bit overvalued at the moment. Zacks.com The price-to-book ratio of 1.72x might look very overvalued among REITs but timberland and farmland REITs usually trade well above their book value. Compared to its peers the company is relatively fairly valued but we can only have a vague idea of how this might change after the close of the acquisition by the end of the third quarter.

Shareholder Returns

PCHUS REITsUS Market
7D-2.5%-4.5%-2.0%
1Y-24.0%-19.2%-20.3%

Return vs Industry: PCH underperformed the US REITs industry which returned -20.4% over the past year.

Return vs Market: PCH underperformed the US Market which returned -22.1% over the past year.

Price Volatility

Is PCH's price volatile compared to industry and market?
PCH volatility
PCH Average Weekly Movement3.8%
REITs Industry Average Movement3.9%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: PCH is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: PCH's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19031,299Eric Cremershttps://www.potlatchdeltic.com

PotlatchDeltic (NASDAQ:PCH) is a leading Real Estate Investment Trust (REIT) that owns 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forest management, is committed to environmental and social responsibility and to responsible governance.

PotlatchDeltic Fundamentals Summary

How do PotlatchDeltic's earnings and revenue compare to its market cap?
PCH fundamental statistics
Market CapUS$3.29b
Earnings (TTM)US$388.95m
Revenue (TTM)US$1.31b

8.5x

P/E Ratio

2.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PCH income statement (TTM)
RevenueUS$1.31b
Cost of RevenueUS$739.95m
Gross ProfitUS$566.74m
Other ExpensesUS$177.79m
EarningsUS$388.95m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 24, 2022

Earnings per share (EPS)4.82
Gross Margin43.37%
Net Profit Margin29.77%
Debt/Equity Ratio41.0%

How did PCH perform over the long term?

See historical performance and comparison

Dividends

4.3%

Current Dividend Yield

73%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is PCH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PCH?

Other financial metrics that can be useful for relative valuation.

PCH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.7x
Enterprise Value/EBITDA6.3x
PEG Ratio-0.1x

Price to Earnings Ratio vs Peers

How does PCH's PE Ratio compare to its peers?

PCH PE Ratio vs Peers
The above table shows the PE ratio for PCH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average28.9x
RYN Rayonier
32.5x-17.2%US$4.6b
NSA National Storage Affiliates Trust
41.1x9.6%US$5.2b
FCPT Four Corners Property Trust
21.4x6.9%US$2.0b
EPR EPR Properties
20.7x10.3%US$2.8b
PCH PotlatchDeltic
8.5x-57.7%US$3.3b

Price-To-Earnings vs Peers: PCH is good value based on its Price-To-Earnings Ratio (8.5x) compared to the peer average (28.9x).


Price to Earnings Ratio vs Industry

How does PCH's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Earnings vs Industry: PCH is good value based on its Price-To-Earnings Ratio (8.5x) compared to the US REITs industry average (26x)


Price to Earnings Ratio vs Fair Ratio

What is PCH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PCH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8.5x
Fair PE Ratio12.4x

Price-To-Earnings vs Fair Ratio: PCH is good value based on its Price-To-Earnings Ratio (8.5x) compared to the estimated Fair Price-To-Earnings Ratio (12.4x).


Share Price vs Fair Value

What is the Fair Price of PCH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PCH ($40.73) is trading below our estimate of fair value ($222.02)

Significantly Below Fair Value: PCH is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is PotlatchDeltic forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-57.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PCH's earnings are forecast to decline over the next 3 years (-57.7% per year).

Earnings vs Market: PCH's earnings are forecast to decline over the next 3 years (-57.7% per year).

High Growth Earnings: PCH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PCH's revenue is expected to decline over the next 3 years (-16.6% per year).

High Growth Revenue: PCH's revenue is forecast to decline over the next 3 years (-16.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if PCH's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has PotlatchDeltic performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


42.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PCH has high quality earnings.

Growing Profit Margin: PCH's current net profit margins (29.8%) are lower than last year (34.4%).


Past Earnings Growth Analysis

Earnings Trend: PCH's earnings have grown significantly by 42.4% per year over the past 5 years.

Accelerating Growth: PCH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PCH had negative earnings growth (-22.2%) over the past year, making it difficult to compare to the REITs industry average (45.8%).


Return on Equity

High ROE: PCH's Return on Equity (21.1%) is considered high.


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Financial Health

How is PotlatchDeltic's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: PCH's short term assets ($651.2M) exceed its short term liabilities ($155.2M).

Long Term Liabilities: PCH's short term assets ($651.2M) do not cover its long term liabilities ($873.2M).


Debt to Equity History and Analysis

Debt Level: PCH's net debt to equity ratio (12.9%) is considered satisfactory.

Reducing Debt: PCH's debt to equity ratio has reduced from 339.7% to 41% over the past 5 years.

Debt Coverage: PCH's debt is well covered by operating cash flow (71.7%).

Interest Coverage: PCH's interest payments on its debt are well covered by EBIT (17.3x coverage).


Balance Sheet


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Dividend

What is PotlatchDeltic current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.32%

Current Dividend Yield

Dividend Yield vs Market

PotlatchDeltic Dividend Yield vs Market
How does PotlatchDeltic dividend yield compare to the market?
SegmentDividend Yield
Company (PotlatchDeltic)4.3%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.6%
Industry Average (REITs)4.0%
Analyst forecast in 3 Years (PotlatchDeltic)4.3%

Notable Dividend: PCH's dividend (4.32%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: PCH's dividend (4.32%) is low compared to the top 25% of dividend payers in the US market (4.69%).


Stability and Growth of Payments

Stable Dividend: PCH's dividends per share have been stable in the past 10 years.

Growing Dividend: PCH's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (72.8%), PCH's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (26.2%), PCH's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Eric Cremers (58 yo)

9.5yrs

Tenure

US$5,690,852

Compensation

Mr. Eric J. Cremers has been the President of PotlatchDeltic Corporation (formerly, Potlatch Corporation) since March 1, 2013 and has been its Chief Executive Officer since January 1, 2021. He served as Ch...


CEO Compensation Analysis

Eric Cremers's Compensation vs PotlatchDeltic Earnings
How has Eric Cremers's remuneration changed compared to PotlatchDeltic's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$389m

Mar 31 2022n/an/a

US$457m

Dec 31 2021US$6mUS$866k

US$424m

Sep 30 2021n/an/a

US$485m

Jun 30 2021n/an/a

US$500m

Mar 31 2021n/an/a

US$315m

Dec 31 2020US$3mUS$614k

US$167m

Sep 30 2020n/an/a

US$78m

Jun 30 2020n/an/a

US$18m

Mar 31 2020n/an/a

US$32m

Dec 31 2019US$3mUS$596k

US$56m

Sep 30 2019n/an/a

US$46m

Jun 30 2019n/an/a

US$86m

Mar 31 2019n/an/a

US$115m

Dec 31 2018US$2mUS$577k

US$123m

Sep 30 2018n/an/a

US$133m

Jun 30 2018n/an/a

US$106m

Mar 31 2018n/an/a

US$84m

Dec 31 2017US$2mUS$560k

US$86m

Sep 30 2017n/an/a

US$89m

Jun 30 2017n/an/a

US$83m

Mar 31 2017n/an/a

US$28m

Dec 31 2016US$2mUS$544k

US$11m

Sep 30 2016n/an/a

US$114k

Jun 30 2016n/an/a

-US$6m

Mar 31 2016n/an/a

US$26m

Dec 31 2015US$1mUS$548k

US$32m

Compensation vs Market: Eric's total compensation ($USD5.69M) is about average for companies of similar size in the US market ($USD6.87M).

Compensation vs Earnings: Eric's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: PCH's management team is considered experienced (3.8 years average tenure).


Board Members

Experienced Board: PCH's board of directors are considered experienced (6.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NasdaqGS:PCH Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
02 Mar 22SellUS$3,396,280Michael CoveyIndividual61,448US$55.27

Ownership Breakdown

What is the ownership structure of PCH?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders1,579,4162.0%
General Public20,741,36625.7%
Institutions58,451,04072.4%

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 20.5%.


Top Shareholders

Top 25 shareholders own 55.27% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
12.78%
The Vanguard Group, Inc.
10,322,861$420.5m-1.72%0.01%
11.74%
BlackRock, Inc.
9,486,509$386.4m5.85%0.01%
3.69%
Pictet Asset Management Limited
2,983,358$121.5m-2.33%0.11%
2.71%
State Street Global Advisors, Inc.
2,186,161$89.0m1.44%no data
2.44%
T. Rowe Price Group, Inc.
1,970,027$80.2m-0.09%0.01%
2.17%
Norges Bank Investment Management
1,755,109$71.5m0%0.01%
1.79%
Geode Capital Management, LLC
1,447,519$59.0m1.32%0.01%
1.79%
Legal & General Investment Management Limited
1,445,382$58.9m-0.32%0.02%
1.73%
Wellington Management Group LLP
1,396,272$56.9m-33.88%0.01%
1.58%
BNY Mellon Asset Management
1,274,878$51.9m15.52%0.01%
1.43%
Northern Trust Global Investments
1,158,777$47.2m-3.4%0.01%
1.37%
Janus Henderson Group plc
1,107,262$45.1m-24.36%0.03%
1.29%
Silvercrest Asset Management Group LLC
1,038,752$42.3m8.08%0.33%
1.25%
Charles Schwab Investment Management, Inc.
1,010,008$41.1m1.53%0.01%
1.17%
Columbia Management Investment Advisers, LLC
942,911$38.4m10.55%0.01%
0.93%
R. Pierson
748,533$30.5m0%no data
0.86%
Millennium Management LLC
690,678$28.1m835.7%0.04%
0.73%
Teachers Insurance and Annuity Association-College Retirement Equities Fund
588,609$24.0m1.39%0.01%
0.71%
Westwood Management Corp.
572,112$23.3m-3.8%0.26%
0.68%
Inclusive Capital Partners, L.P.
545,291$22.2m0%1.82%
0.59%
Grantham Mayo Van Otterloo & Co. LLC
477,351$19.4m35.54%0.07%
0.49%
J.P. Morgan Asset Management, Inc.
395,245$16.1m2.33%no data
0.48%
PanAgora Asset Management, Inc.
386,507$15.7m44.58%0.1%
0.44%
Raymond James Financial Inc., Asset Management Arm
358,697$14.6m3.67%0.01%
0.44%
AQR Capital Management, LLC
357,482$14.6m38.09%0.03%

Company Information

PotlatchDeltic Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: PotlatchDeltic Corporation
  • Ticker: PCH
  • Exchange: NasdaqGS
  • Founded: 1903
  • Industry: Specialized REITs
  • Sector: Real Estate
  • Implied Market Cap: US$3.290b
  • Shares outstanding: 80.77m
  • Website: https://www.potlatchdeltic.com

Number of Employees


Location

  • PotlatchDeltic Corporation
  • 601 West First Avenue
  • Suite 1600
  • Spokane
  • Washington
  • 99201
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PCHNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1969
P4CDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/28 00:00
End of Day Share Price2022/09/28 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.