Plum Creek Timber (PCL) versus Catchmark Timber Trust (CTT) Critical Analysis
Plum Creek Timber (NYSE: PCL) and Catchmark Timber Trust (NYSE:CTT) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.
This table compares Plum Creek Timber and Catchmark Timber Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Plum Creek Timber||10.53%||9.14%||2.73%|
|Catchmark Timber Trust||-15.09%||-3.64%||-1.90%|
This table compares Plum Creek Timber and Catchmark Timber Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Plum Creek Timber||N/A||N/A||N/A||$1.12||32.63|
|Catchmark Timber Trust||$81.86 million||6.96||-$11.07 million||($0.34)||-38.62|
Plum Creek Timber has higher earnings, but lower revenue than Catchmark Timber Trust. Catchmark Timber Trust is trading at a lower price-to-earnings ratio than Plum Creek Timber, indicating that it is currently the more affordable of the two stocks.
Plum Creek Timber pays an annual dividend of $1.76 per share and has a dividend yield of 4.8%. Catchmark Timber Trust pays an annual dividend of $0.54 per share and has a dividend yield of 4.1%. Plum Creek Timber pays out 157.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Catchmark Timber Trust pays out -158.8% of its earnings in the form of a dividend. Plum Creek Timber has increased its dividend for 2 consecutive years. Plum Creek Timber is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
63.7% of Catchmark Timber Trust shares are owned by institutional investors. 1.2% of Catchmark Timber Trust shares are owned 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.
This is a breakdown of current recommendations for Plum Creek Timber and Catchmark Timber Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Plum Creek Timber||0||0||0||0||N/A|
|Catchmark Timber Trust||0||0||2||0||3.00|
Catchmark Timber Trust has a consensus price target of $12.50, indicating a potential downside of 4.80%. Given Catchmark Timber Trust’s higher possible upside, analysts clearly believe Catchmark Timber Trust is more favorable than Plum Creek Timber.
Plum Creek Timber Company Profile
Plum Creek Timber Company, Inc. (Plum Creek) is a private timberland owner in the United States. The Company operates through segments, including Northern Resources segment consists of timberlands in Maine, Michigan, Montana, New Hampshire, Oregon, Vermont, Washington, West Virginia and Wisconsin; Southern Resources segment consists of timberlands in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas, and Virginia; Energy and Natural Resources segment includes natural resource businesses that focus on opportunities for oil and natural gas production, construction aggregates and mineral extraction, wind power and communication and transportation rights of way; Real Estate segment consists of sales of higher value timberlands and non-strategic timberlands, and Other segment provides timber and wood-fiber procurement services. It owns approximately 6.6 million acres of timberlands located in over 19 states.
Catchmark Timber Trust Company Profile
CatchMark Timber Trust, Inc. is a real estate company investing in timberlands. The Company primarily engages in the ownership, management, acquisition and disposition of timberlands located in the United States. It is focused on investing in timberlands and to manage such assets to provide current income and attractive long-term returns to its stockholders. It owns all its properties and other investments through its operating partnership. The Company generates its income from the harvest and sale of timber, as well as from non-timber related revenue sources, such as recreational leases. In April 2014, the Company acquired 36,300 acres of timberland (known as the Waycross-Panola properties) located in Southeast Georgia and East Texas from Hancock Timber Resource Group. Approximately 55,600 acres of prime timberlands, known as Oglethorpe and Satilla River, add 2.7 million tons of timber to the Company’s merchantable inventory.
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