Timber REITs

Hexagon Energy and Weyerhaeuser Co. said on September 10 they have closed an agreement to develop geothermal projects on Weyerhaeuser timberlands in Washington and Oregon, a deal that could provide an estimated 3 GW of geothermal power generation capacity in the Pacific Northwest. Under the agreement, Hexagon Energy has leased geothermal rights on about 145,000 acres across the two states, part of Weyerhaeuser's holdings as one of the largest private owners of timberland in North America. Kendall Fountain, vice president of Energy and Natural Resources for Weyerhaeuser, said the company's ownership presents a unique platform to evaluate geothermal potential in the region while supporting growth of its Climate Solutions business. Matthew Hantzmon, CEO of Hexagon Energy, said the partnership aims to bring abundant, clean, baseload energy to the Pacific Northwest. The companies noted the collaboration comes amid rising demand for geothermal energy, driven in part by electricity needs from artificial intelligence and data centers. Hexagon Energy, headquartered in Charlottesville, Virginia, has developed and financed more than 3 GW of power generation capacity for U.S. electric utilities, representing more than $4.5 billion in investment, and its current pipeline includes more than 10 GW of power under active development.

Weyerhaeuser Company announced that its board of directors declared a quarterly base cash dividend of $0.21 per share on its common stock, payable on September 18, 2026, to holders of record as of September 4, 2026. Under its cash return framework, the company expects to supplement the quarterly base dividend with additional variable cash to achieve a targeted total return to shareholders of 75 to 80 percent of annual Adjusted Funds Available for Distribution. The company has flexibility to return this additional cash through a supplemental dividend, opportunistic share repurchases, or a combination of both. Weyerhaeuser, one of the world's largest private owners of timberlands, generated $6.9 billion in net sales in 2025 and employs approximately 9,500 people.

Rayonier reported second quarter 2026 net income of $19.1 million, or $0.06 per diluted share, reflecting $10.2 million in merger-related costs and a $2.3 million timber casualty loss. Pro forma net income was $31.5 million, or $0.10 per diluted share, excluding one-time costs related to the merger with PotlatchDeltic. Adjusted EBITDA was $123.7 million, driven by contributions from PotlatchDeltic operations and solid segment-level performance. Southern Timber adjusted EBITDA was $52.6 million, an 85% increase primarily due to 1.5 million tons of incremental harvest volume from the PotlatchDeltic timberlands. Northwest Timber adjusted EBITDA was $26.3 million, increasing nearly fourfold from the prior year period due to higher volumes and sawlog prices in Idaho. Wood Products adjusted EBITDA was $25.0 million, reflecting higher lumber price realizations that reached their highest level in nearly four years. Real Estate adjusted EBITDA was $38.3 million, exceeding management expectations due to strong momentum in rural and improved development sales. Southern Timber harvest volume was 3.35 million tons, doubling versus the prior year quarter following the integration of expanded acreage. Northwest Timber harvest volume was 578,000 tons, increasing 133% due to incremental volume from Idaho and favorable weather conditions. Average lumber price realization was $505 per MBF, representing an 18% increase from the first quarter realization of $427 per MBF. Lumber shipments were 314 million board feet, maintained through the quarter despite industry-wide transportation challenges and flatbed trucking shortages. Real estate revenue was $53.7 million, reflecting the sale of approximately 7,500 acres at an average price of $6,300 per acre. Rural land sales were $40.7 million, consisting of 7,490 acres sold at an average price of $5,439 per acre, including a $4.6 million solar developer sale. Common share repurchases totaled 3.5 million shares, or $72.4 million at an average price of $20.95 per share during the second quarter. Cash available for distribution was $177.1 million for the first six months of 2026, increasing $130.5 million primarily due to the PotlatchDeltic merger. Total debt was $1.86 billion at quarter end, including debt assumed in the recent merger. Cash and cash equivalents were $411.8 million as of June 30, 2026, following debt repayments and active share repurchases. Full year Southern Timber harvest guidance is 12.2 million to 12.5 million tons, incorporating recent land transactions and integration progress. Full year Northwest Timber harvest guidance is 2.0 million to 2.2 million tons, with 600,000 tons anticipated in the third quarter. Full year Real Estate adjusted EBITDA guidance is $180 million to $200 million, supported by a healthy pipeline of development land sales. Solar land pipeline is 77,000 acres, comprising land currently under option for lease or sale to renewable energy developers. RMS timberland sale was $145 million, involving 36,000 acres in Southwest Washington as part of a tax-efficient portfolio optimization strategy. RMS timberland acquisition was $146 million, adding 57,000 acres in Texas and Alabama to concentrate capital in high-growth southern markets. Term loan repayment was $200 million, completed in April using cash on hand to manage interest expense in a higher-rate environment. Average pine sawtimber price was $44.46 per ton, decreasing from $47.87 per ton due to changes in the geographic mix from the expanded southern footprint.

Rayonier reported second quarter 2026 GAAP earnings of $19 million, or $0.06 per share, with adjusted net income of $32 million, or $0.10 per share, and adjusted EBITDA of $124 million. The company also announced a tax-efficient like-kind exchange with Resource Management Service involving the sale of approximately 36,000 acres in Southwest Washington for $145 million and the acquisition of approximately 57,000 acres in Texas and Alabama for $146 million. Southern Timber adjusted EBITDA rose 85% to $53 million, Northwest Timber adjusted EBITDA increased to $26 million from $7 million, Wood Products generated $25 million, and Real Estate adjusted EBITDA was $38 million. Rayonier repurchased 3.5 million shares for $72 million in the quarter and has $126 million remaining under its authorization. Full-year harvest guidance is 12.2 million to 12.5 million tons for Southern Timber and 2 million to 2.2 million tons for Northwest Timber, with Real Estate adjusted EBITDA expected between $180 million and $200 million.

Weyerhaeuser Company reported second-quarter 2026 adjusted earnings of 13 cents per share, beating the Zacks Consensus Estimate of six cents by 116.7%. Net sales slipped 0.9% to $1.87 billion but exceeded the consensus of $1.80 billion. Wood Products adjusted EBITDA jumped to $129 million from $71 million sequentially, driven by a lumber recovery where adjusted EBITDA rose to $73 million from $27 million. However, oriented strand board swung to a $6 million loss from a $3 million profit, and total adjusted EBITDA declined to $310 million from $336 million a year earlier. Management expects third-quarter Timberlands EBITDA slightly higher, but Strategic Land Solutions EBITDA to fall about $45 million and Wood Products EBITDA slightly lower before changes in lumber and OSB realizations.

Weyerhaeuser Company shares have gained 13.1% in the past four weeks following a second-quarter 2026 earnings beat and a sequential recovery in its Wood Products segment. Adjusted earnings of 13 cents per share topped the Zacks Consensus Estimate of six cents by 116.7%, while net sales of $1.87 billion beat the consensus mark of $1.80 billion by 4% despite a 0.9% year-over-year decline. Wood Products adjusted EBITDA rose to $129 million from $71 million sequentially, driven by a 15% increase in lumber realizations. However, the stock trades at 49.9 times forward 12-month earnings, well above its sub-industry average of 27.2 times and its five-year median of 30.2 times, and faces headwinds from soft housing demand, elevated costs, and volatile commodity pricing.

Rayonier reported quarterly earnings of $0.10 per share, surpassing the Zacks Consensus Estimate of $0.06 per share by 66.67%. Revenue for the quarter ended June 2026 reached $396.5 million, exceeding the consensus estimate by 8.88% and comparing to $106.5 million a year ago. The company has beaten consensus EPS estimates in all of the last four quarters and topped revenue estimates three times over that period. Rayonier shares have gained about 1.3% year-to-date, underperforming the S&P 500's 13% advance. Ahead of the report, the estimate revision trend was favorable, giving the stock a Zacks Rank #2 (Buy).

Rayonier Inc. has completed two strategic timberland transactions with Resource Management Service, LLC, selling about 36,000 acres in southwest Washington for $145 million and concurrently acquiring about 57,000 acres in Alabama and Texas for $146 million. The deals were structured as a tax-efficient, like-kind exchange and are expected to be accretive to cash flow on a timber-only basis, with further upside potential from higher-and-better-use real estate sales and land-based solutions. The company estimates the transactions will generate incremental Adjusted EBITDA of approximately $3 million annually from timber operations over the next ten years, excluding potential contributions from HBU real estate sales and land-based solutions. The acquired properties are highly productive, with an estimated 69% plantable and an average expressed site index of 75 feet, and are complementary to Rayonier's existing U.S. South footprint. President and CEO Mark McHugh said the off-market deal aligns with the company's focus on concentrating capital in markets with strong cash flow attributes and favorable long-term growth prospects.

Weyerhaeuser raised its full-year 2026 adjusted EBITDA guidance for its Strategic Land Solutions segment to approximately $450 million, an increase of $25 million from prior guidance. The company reported second-quarter GAAP earnings of $162 million, or $0.23 per diluted share, on net sales of $1.9 billion, with adjusted EBITDA totaling $310 million. Wood Products contributed $71 million to second quarter earnings with Adjusted EBITDA of $129 million, a $58 million improvement compared to the first quarter. Management also updated its lumber sensitivity framework, expecting a $10 change in commodity prices to translate to approximately $50 million of annual EBITDA. The company generated approximately $400 million of cash from operations in the quarter and ended with approximately $530 million of cash and total debt of $5.4 billion.

Weyerhaeuser reported second-quarter revenue of $1.87 billion, surpassing the Zacks Consensus Estimate of $1.79 billion by 4.03 percent. Earnings per share came in at $0.13, more than double the consensus estimate of $0.06 and up from $0.12 a year earlier. Net sales in the Wood Products segment reached $1.36 billion, exceeding the $1.32 billion analyst forecast, while Timberlands segment third-party net sales from recreational and other lease revenue hit $20 million, slightly above the $19.88 million estimate. Structural lumber third-party net sales were $591 million, beating the $564.44 million consensus, and engineered solid section net sales of $181 million topped the $163.09 million estimate. The stock has gained 3.8 percent over the past month, compared with a 1.5 percent decline for the Zacks S&P 500 composite.

Weyerhaeuser reported a second-quarter profit of $162 million, or $0.23 per share, up from $87 million, or $0.12 per share, a year earlier. Excluding items, adjusted earnings were $91 million, or $0.13 per share. Revenue slipped 0.9% to $1.867 billion from $1.884 billion in the same period last year.

Rayonier declared a third quarter cash dividend of $0.26 per common share. The dividend is payable on September 30, 2026, to shareholders of record on September 16, 2026. The board also declared a third quarter cash distribution of $0.26 per operating partnership unit for Rayonier, L.P., payable on the same dates.

Weyerhaeuser declared a quarterly dividend of $0.21 per share, in line with its previous payout. The dividend is payable September 18 to shareholders of record on September 4, with the ex-dividend date also September 4. Based on the current share price, the forward yield is 3.38%.

Zacks Equity Research identifies Weyerhaeuser, Trex, and Worthington as three wood-industry stocks capable of navigating ongoing challenges. The Zacks Building Products – Wood industry faces headwinds from elevated construction costs, tariff uncertainty, and subdued repair-and-remodel spending, with the group’s Zacks Industry Rank at 206, placing it in the bottom 17% of more than 250 Zacks industries. Despite this, underlying demand for replacements and infrastructure investments provides support, and the three highlighted companies are leveraging product innovation, cost discipline, and strategic acquisitions. Worthington sees growth from AI-driven data-center demand and operational improvements, with consensus EPS growth estimates of 11.1% for fiscal 2026 and 14.8% for fiscal 2027. Weyerhaeuser benefits from new products like AeroStrand and an expanding renewable-energy pipeline, with 2026 EPS estimates revised upward to 32 cents from 26 cents over the past 60 days. Trex is accelerating the conversion from wood decking, which still represents about 75% of the market, and has seen its 2026 EPS estimate rise to $1.68 from $1.63, supported by capacity expansion and a strong innovation pipeline.

Zacks Investment Research identifies Weyerhaeuser, Trex, and Worthington Enterprises as three wood-product companies positioned to thrive despite a challenging operating environment. The Zacks Building Products – Wood industry, a nine-stock group within the broader Construction sector, currently carries a Zacks Industry Rank of 206, placing it in the bottom 17% of more than 250 Zacks industries, with aggregate 2026 earnings estimates declining to $1.99 per share from $2.03 since March 2026. The industry has gained 10% over the past year, underperforming the broader Zacks Construction sector's 24.6% rise and the S&P 500's 28.2% gain, while trading at a forward 12-month price-to-earnings ratio of 27.2, above the S&P 500's 21.34 and the sector's 21.73. Weyerhaeuser, a Zacks Rank #3 company, has seen its 2026 earnings estimate revised upward to 32 cents from 26 cents per share over the past 60 days, implying 60% year-over-year growth. Trex, also a Zacks Rank #3 company, has had its 2026 earnings estimate raised to $1.68 from $1.63 per share over the same period. Worthington, another Zacks Rank #3 company, is expected to deliver fiscal 2026 and 2027 earnings per share growth of 11.1% and 14.8%, respectively.

Weyerhaeuser Company has launched the fifth year of its Fighting Fires Together campaign, unifying wildfire management and community support efforts across Oregon. The campaign provides nearly $25,000 in grants to four rural fire protection districts, a $10,000 investment in Lane Community College's Wildland Fire Management Program, and mental health resources from Firefighter Behavioral Health Alliance for wildland firefighters. It also includes wildfire response partnerships with the Oregon Department of Forestry and local agencies. The initiative builds on a 38-acre land donation to Row River RFPD in 2025 for a new emergency substation.

Zacks Investment Research identifies Weyerhaeuser, Trex, and Worthington Enterprises as wood stocks positioned to navigate ongoing industry challenges. The Zacks Building Products – Wood industry faces pressure from elevated construction costs, affordability issues, and tariff uncertainty, including President Trump's January 2026 decision to delay higher tariffs on furniture, kitchen cabinets and vanities until January 1, 2027, which offers only limited relief. Although the White House imposed a 25% tariff on these products in October 2025, steeper increases to 30% for furniture and 50% for cabinets and vanities were postponed for one year, keeping the tariff at 25% through at least 2027 and doing little to ease cost pressures for domestic wood producers. The industry carries a Zacks Industry Rank of 206, placing it in the bottom 17% of over 250 Zacks industries, with aggregate 2026 earnings estimates declining to $1.99 per share from $2.03 since March 2026. Despite this, Weyerhaeuser has seen its 2026 earnings estimate revised upward to 32 cents from 26 cents per share over the past 60 days, implying 60% year-over-year growth, while Trex's 2026 estimate rose to $1.68 from $1.63, and Worthington's fiscal 2026 and 2027 EPS are expected to grow 11.1% and 14.8%, respectively.