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Rayonier Inc RYN

Morningstar Rating
$33.41 +0.20 (0.60%)
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Company Report

We Still Expect Single-Family Construction and Repair and Remodel Spending to Grow in 2024

New single-family home sales increased 4% in 2023 to 666,000 units, as homebuilders capitalized on a dearth of existing for-sale inventory while also offering more sales incentives, cutting base home prices, and building smaller homes to improve affordability. By the fourth quarter of 2023, homebuilders began to pull back on sales incentives as the average 30-year fixed mortgage rate retreated from 7.62% in October 2023 to 6.64% in January 2024. However, mortgage rates have trended higher recently, and we now forecast the average 30-year fixed rate will be 6.50% in 2024, up from our previous forecast of 6.10%. Even so, that’s lower than the 2023 average of 6.81%, and we think homebuilders won’t hesitate to increase sales incentives if needed; they still enjoyed above-average gross profit margins last year with elevated incentives. As such, in 2024, we think new-home sales will increase 9% to 730,000 units and single-family housing starts will increase 4% to 985,000 units. However, we expect total housing starts will decline roughly 5% to 1,345,000 units due to a 23% decline in multifamily starts to 360,000 units, as there’s currently approximately 1,000,000 multifamily units under construction—the largest backlog in at least 50 years.

Price vs Fair Value

RYN is trading at a 5% discount.
Price
$33.22
Fair Value
$15.00
Uncertainty
Medium
1-Star Price
$13.75
5-Star Price
$95.90
Economic Moat
Ddym
Capital Allocation
Wlgblvlg

Bulls Say, Bears Say

Bulls

The vast majority of Rayonier’s timberland is located in the southeastern U.S. This is the most popular region for sawmill capacity increases and will provide a strong avenue for timber volume and price growth.

Bears

Recent spikes in timberland prices could limit Rayonier’s ability to expand its portfolio and force the firm to overpay for timberland acquisitions.

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News

Trading Information

Previous Close Price
$33.21
Day Range
$33.2033.68
52-Week Range
$24.8435.29
Bid/Ask
$13.37 / $34.57
Market Cap
$4.97 Bil
Volume/Avg
664,559 / 626,398

Key Statistics

Price/Earnings (Normalized)
92.81
Price/Sales
4.78
Dividend Yield (Trailing)
3.41%
Dividend Yield (Forward)
3.41%
Total Yield
3.50%

Company Profile

Rayonier owns and manages over 2 million acres of timberland in the United States. It is one the largest private landowners in North America. The firm also owns timberland in New Zealand. Rayonier is structured as a real estate investment trust and is not required to pay federal income taxes on earnings generated by timber harvest activities.
Sector
Real Estate
Industry
REIT - Specialty
Stock Style Box
Small Core
Total Number of Employees
438

Competitors

Valuation

Metric
RYN
CFP
WFG
Price/Earnings (Normalized)
92.8110.1011.41
Price/Book Value
2.660.541.00
Price/Sales
4.780.391.12
Price/Cash Flow
17.2114.81
Price/Earnings
RYN
CFP
WFG

Financial Strength

Metric
RYN
CFP
WFG
Quick Ratio
1.771.261.24
Current Ratio
2.262.492.26
Interest Coverage
4.37−12.86−11.58
Quick Ratio
RYN
CFP
WFG

Profitability

Metric
RYN
CFP
WFG
Return on Assets (Normalized)
1.44%−5.33%2.08%
Return on Equity (Normalized)
2.91%−8.58%2.71%
Return on Invested Capital (Normalized)
2.29%−7.20%2.07%
Return on Assets
RYN
CFP
WFG
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