West Fraser (TSX:WFT): A Forest Stock To Buy As Lumber Price Rally

April 16, 2021 02:03 PM EDT | By Anuj

West Fraser (TSX:WFT): A Forest Stock To Buy As Lumber Price Rally

West Fraser Timber Co. Ltd. (TSX:WFT)

The stock is trading at C$ 104.83 (around 11:10 ET on April 16), up almost C$ 19.43 apiece from C$ 85.40 per common share in February 2021(Prior to its acquisition of Norbord). Its market cap has also increased to C$ 12.80 billion. It distributes a cash dividend of C$ 0.20 per common share quarterly.

The scrips gained 265 per cent in the past one year, outperforming the S&P/TSX Forest Products (Sub Industry) Index, which has increased by 14.54 per cent relatively. The wood stock has swelled by 29 per cent year-to-date (YTD).

It has a return on equity of 27.83 per cent and current earnings per share of C$ 11.30. The forest goods stock could maintain its current bull-run in the wake of higher lumber demand across North America.

West Fraser's One-Year Stock Performance Chart. (Source: Refinitiv)

In full-year 2020 earnings, the company reported an adjusted EBITDA of C$ 1.46 billion. Its annual sales also rose to C$ 5.85 billion in 2020, up against 4.88 billion in 2019. Its earnings per share soared to C$ 12.27 in 2020, compared with a loss of C$ 0.31 per common share.

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