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.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$40.73|
|52 Week High||US$61.51|
|52 Week Low||US$39.10|
|1 Month Change||-11.99%|
|3 Month Change||-7.83%|
|1 Year Change||-23.98%|
|3 Year Change||0.47%|
|5 Year Change||-20.91%|
|Change since IPO||6.48%|
Recent News & Updates
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.
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.
|PCH||US REITs||US Market|
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.
|PCH Average Weekly Movement||3.8%|
|REITs Industry Average Movement||3.9%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
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
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
|PCH fundamental statistics|
Is PCH overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|PCH income statement (TTM)|
|Cost of Revenue||US$739.95m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 24, 2022
|Earnings per share (EPS)||4.82|
|Net Profit Margin||29.77%|
How did PCH perform over the long term?See historical performance and comparison
4.3%Current Dividend Yield
Is PCH undervalued compared to its fair value, analyst forecasts and its price relative to the market?
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
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.
|What is PCH's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does PCH's PE Ratio compare to its peers?
|PCH PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
NSA National Storage Affiliates Trust
FCPT Four Corners Property Trust
EPR EPR Properties
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.
|Current PE Ratio||8.5x|
|Fair PE Ratio||12.4x|
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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How is PotlatchDeltic forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?
Future Growth Score0/6
Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
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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How has PotlatchDeltic performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
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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How is PotlatchDeltic's financial position?
Financial Health Score5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
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).
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What is PotlatchDeltic current dividend yield, its reliability and sustainability?
Dividend Score 5/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|PotlatchDeltic Dividend Yield vs Market|
|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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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Eric Cremers (58 yo)
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|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$6m||US$866k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$3m||US$614k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$3m||US$596k|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$2m||US$577k|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$2m||US$560k|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$2m||US$544k|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$1m||US$548k|
Compensation vs Market: Eric's total compensation ($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.
Experienced Management: PCH's management team is considered experienced (3.8 years average tenure).
Experienced Board: PCH's board of directors are considered experienced (6.9 years average tenure).
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
|02 Mar 22||SellUS$3,396,280||Michael Covey||Individual||61,448||US$55.27|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 20.5%.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
PotlatchDeltic Corporation's employee growth, exchange listings and data sources
- 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
- PotlatchDeltic Corporation
- 601 West First Avenue
- Suite 1600
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|PCH||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Jan 1969|
|P4C||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jan 1969|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/28 00:00|
|End of Day Share Price||2022/09/28 00:00|
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.