Norbord & West Fraser: 2 'Price Performer’ Forest Product Stocks

Summary

  • Norbord provides a quarterly dividend of C$ 0.60 per stock, with a current dividend yield of 4.315 per cent. The company stocks have returned 30 per cent gains in the last one month.
  • West Fraser is paying a cash dividend of C$ 0.20 per stock, quarterly. Its stocks have jumped by 20 per cent in the last one month.
  • Both companies are delivering a double-digit 5-year dividend growth, as per TMX data.

Investment in the residential construction activities increased for the sixth straight month, growing by 0.7 per cent in October, as per a Statistic Canada report.

The furniture industry suffered as construction sites in the country shut down. And most locations that are open encountered disrupted supply chain and operational limitations. However, two midcap forest product firms have turned the tables amid the COVID outbreak and made it to TMX’s Top Price Performers stocklist. These are Norbord Inc. (TSX: OSB) and West Fraser Timber Co. Ltd. (TSX: WFT).

 

Norbord Inc. (TSX: OSB)

Current Stock Price: C$ 55.62

 

The leading producer of oriented strand board has a current market cap of C$ 4.48 billion.

In the last one month, the company stocks have added more than 30 per cent gains and jumped over 48 per cent year-to-date (YTD). Norbord stocks have rocketed nearly 109 per cent in the last six months.

 

The strand board firm stocks have outperformed the markets (TSX and TSXV) with the largest price gains in the last 30 days, as per the TMX portal. The stock also ranks high on TMX’s Top basic materials stock list.

 

The stock’s current price-to-earnings (P/E) ratio is 14.00, return on equity (ROE) is 28.95 per cent and return on assets (ROA) is 11.52 per cent. Its current price-to-cashflow stands at 7.50, and its debt-to-equity ratio is 0.76. The profit-to-book (P/B) ratio is 3.987, and its present earnings per share (EPS) is 3.82, as per TMX data.

 

The company holds a quarterly dividend of C$ 0.60 per stock, with a current dividend yield of 4.315 per cent. And its five-year dividend growth is almost 18 per cent.

 

Norbord reported adjusted earnings of US $2.52 per share in the third quarter of 2020 against US$ 0.38 per share in the second quarter of 2020.

 

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

Current Stock Price: C$ 83.14

 

The softwood lumber company’s current market cap is C$ 5.52 billion.

Its stocks have increased by over 20 per cent in the last one month. The lumber stock has amplified nearly 44 per cent YTD.

West Fraser stocks have zoomed nearly 102.58 in the last six months.

 

This company stocks also made it to TMX’s top price performers list.

West Fraser pays a quarterly dividend of C$ 0.20 per share, with a present dividend yield of 0.962 per cent. Its 5-year dividend growth is almost 28.20 per cent.

 

It delivers an ROE of 13.60 per cent and a return on assets of 7.62 per cent. The P/B ratio is 2.028, and its EPS is C$ 5.36. Its present price-to-cashflow is 5.70, and its D/E ratio is 0.24. The current P/E ratio stands at 15, as per the TMX portal.

 

The company is yet to provide a closing update on its Norbord acquisition development.


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