July 31, 2025 a 12:46 pm
WY: Dividend Analysis - Weyerhaeuser Company
Weyerhaeuser Company stands as a significant player in the Timberland sector, demonstrating a robust tradition of consistent dividend payments over 49 years without any cuts or suspensions. However, the high payout ratios signify that dividends are currently not well-covered by earnings, posing potential risks if profitability does not improve.
📊 Overview
In the Timberland sector, Weyerhaeuser's dividend yield is relatively attractive at 3.16%. The company has a long history of 49 years of dividend payments, underscoring its commitment to returning capital to shareholders. Despite the consistency, the last few years indicate a downtrend in dividend growth, requiring cautious optimism for future growth expectations.
| Attribute | Detail |
|---|---|
| Sector | Timberland |
| Dividend yield | 3.16% |
| Current dividend per share | 0.939 USD |
| Dividend history | 49 years |
| Last cut or suspension | None |
🔎 Dividend History
Weyerhaeuser's historical dividend payments have fluctuated, demonstrating resilience despite economic cycles. This consistency is crucial for income-focused investors. The dividend performance reflects the company's ability to generate stable cash flows, even in volatile markets.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.42 |
| 2024 | 0.94 |
| 2023 | 1.66 |
| 2022 | 2.17 |
| 2021 | 1.18 |
📈 Dividend Growth
The growth rates over recent years are a critical metric for assessing a company's dividend sustainability. A negative growth can indicate potential underlying issues impacting future payouts or declines in financial health.
| Time | Growth |
|---|---|
| 3 years | -7.30% |
| 5 years | -7.12% |
The average dividend growth is -7.12% over 5 years. This shows moderate but steady dividend decline, which may challenge investor confidence unless corrective measures are adopted.
💹 Payout Ratio
Payout ratios provide an indication of how much earnings and cash flows are used for dividends. Elevated levels may reflect dividends exceeding profit, impacting sustainability.
| Key figure | Ratio |
|---|---|
| EPS-based | 243.57% |
| Free cash flow-based | 179.72% |
EPS and FCF payout ratios of 243.57% and 179.72% respectively indicate dividends exceed earnings and cash flow, raising concerns about long-term sustainability if unaddressed.
💰 Cashflow & Capital Efficiency
Examining cash flow and capital efficiency reflects a firm's financial health and its ability to fund dividends sustainably. Healthy metrics here are vital for confidence in continuous payout policies.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 1.66% | 2.96% | 8.99% |
| Earnings Yield | 1.93% | 3.30% | 8.17% |
| CAPEX to Operating Cash Flow | 58.93% | 47.45% | 26.94% |
| Stock-based Compensation to Revenue | 0.00% | 0.47% | 0.32% |
| Free Cash Flow / Operating Cash Flow Ratio | 33.83% | 52.55% | 73.06% |
Despite FCF yield declines, Weyerhaeuser's extensive CAPEX indicates reinvestment in future operations. The company must continue optimizing cash flow usage to ensure dividend integrity.
🛡️ Balance Sheet & Leverage Analysis
A stable leverage profile and liquidity gauge the ability to meet obligations while supporting dividends. Strong metrics here are crucial for sustaining financial flexibility and shareholder returns.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.53 | 0.50 | 0.47 |
| Debt-to-Assets | 30.87% | 29.96% | 29.14% |
| Debt-to-Capital | 34.43% | 33.20% | 31.98% |
| Net Debt to EBITDA | 3.69 | 2.29 | 0.98 |
| Current Ratio | 1.79 | 2.94 | 1.58 |
| Quick Ratio | 1.17 | 2.22 | 1.26 |
| Financial Leverage | 1.70 | 1.66 | 1.61 |
Leverage remains well-managed, promoting balance sheet strength. However, strategic debt management is crucial as debt-to-EBITDA shows upward pressures, potentially increasing risk.
🔥 Fundamental Strength & Profitability
Profit margins and return metrics are key to evaluating operational efficiency and return on investments. Strong figures here support robust dividend coverages and growth potential.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 4.07% | 8.20% | 17.49% |
| Return on Assets | 2.39% | 4.94% | 10.84% |
| Net Margin | 5.56% | 10.93% | 18.46% |
| EBIT Margin | 9.77% | 15.86% | 25.28% |
| EBITDA Margin | 16.82% | 22.37% | 34.62% |
| Gross Margin | 18.43% | 21.92% | 35.55% |
| R&D to Revenue | 0.06% | 0.09% | 0.06% |
Profitability is under pressure, as seen by diminishing margins. Continued focus on operational efficiency and strategic cost management is essential for boosting profitability and enhancing shareholder value.
🗺️ Price Development
🔍 Dividend Scoring System
| Criteria | Score | Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 3 | |
| Dividend Growth | 2 | |
| Payout Ratio | 1 | |
| Financial Stability | 3 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 22/40
🗣️ Rating
Overall, Weyerhaeuser offers a high dividend yield but struggles with high payout ratios and slowing growth, offering mixed appeal for income-focused investors. While its extensive dividend history and commitment are promising, vigilant monitoring of profitability and payout coverages is paramount to sustaining future payouts. Improving fundamentals should bolster its dividend reputation and investor confidence.