Blazing threats of global warming have raised panic alarms across the globe, leading to greater consciousness toward building up forestry. Probably this is why a single day has been accommodated since March 21, 2013, to honor the worth of forest reservation. Source: Nasdaq Agreed, it is a socially-conscious idea, but the investing world has a lot to benefit from forestry. Many companies are engaged in the timber industry. The industry has a low or negative correlation with traditional asset classes. Including this asset class in one’s portfolio provides excellent portfolio diversification, resulting in low volatility of portfolio returns. Investors might be surprised to know that timber ETFs like iShares Global Timber & Forestry ETFWOOD have easily surpassed broader market indices like the S&P 500 this year. The fund has gained more than 37% in the last one year (as of Mar 20, 2018). Lumber prices have been benefiting from the supply crunch (due to last year’s wildfires in Canada’s British Columbia, the world’s top exporter of softwood lumber) and strained trade relations between Canada and the United States. Last April, President Donald Trump announced a tariff of up to 24% on imports from the Canadian softwood lumber industry. Amid rising prices, US builders are reported to be hoarding lumber ‘for what is expected to be one of the busiest construction seasons in years,’ according to Wall Street Journal. Agreed, housing starts slipped 7.0% to a seasonally adjusted annual rate of 1.236 million units in February, but single-family projects rose for the second consecutive month. Single-family housing units under construction witnessed the highest number in February since June 2008. With single-family homebuilding making up the largest pie of the housing market, the timber industry definitely has a reason see price escalation. Moreover, profits from harvesting wood are subject to low-taxed capital gains. This makes shareholders in forest product companie organized as REITs enjoy higher current income. Weyerhaeuser Company REITWY yields about 3.60% annually while Catchmark Timber Trust Inc ‘s CTT dividend yield is 4.24% (as of Mar 20, 2018). Stock Picks Given this upbeat backdrop, we have highlighted a few timber-related stocks that investors could consider for a greener portfolio. All stocks come from a top-ranked Zacks industry (top 4%). Louisiana-Pacific Corporation LPX This Zacks Rank #1 (Strong Buy) company manufactures building materials and engineered wood products in the United States, Canada, Chile and Brazil. The stock has a VGM (Value, Growth, Momentum) of B. Universal Forest Products Inc. UFPI It is a holding company of businesses that form one of the largest producers of wood and wood-alternative products in North America. It has a Zacks Rank #2 (Buy). Rayonier Inc. RYN It is a timberland real estate investment trust with assets located in some of the most-productive timber growing regions in the United States and New Zealand. It has a Zacks Rank #2. Potlatch Corporation PCH This Zacks Rank #1 company is a Real Estate Investment Trust with timberlands in Alabama, Arkansas, Idaho, Minnesota and Mississippi. Boise Cascade L.L.C. BCC This Zacks Rank #1 company operates as a wood products manufacturer and building materials distributor. The stock has a VGM of A.
American government hit the Canadian forestry industry with more duties this week as it upheld counterveiling duties on Canadian newsprint. Source: Times Colonist The United States Department of Commerce said in a statement that a preliminary investigation found Canadian exporters underpriced uncoated groundwood paper by between 0 and 22.16%. Uncoated groundwood paper includes newsprint, as well as book publishing, printing and writing papers. “President Trump made it clear from the beginning that we will vigorously administer our trade laws to provide US industry with relief from unfair trade practices,” Commerce Secretary Wilbur Ross said in a statement. The department said it determined Canadian exporters have sold newsprint in the US at as much as 22.16% less than fair value and it will collect cash corresponding to those rates. It noted that the maximum margin of 22.16% is lower than the up to 54.97% rate alleged by Washington-based North Pacific Paper Company, which made the petition to the department to impose the tariffs. It complained Canada was dumping newsprint into the American market and unfairly subsidizing its industry at home. Canada is the largest exporter of newsprint in the world, with a market dominated by Resolute Forest Products, Kruger and Catalyst Paper Corp of British Columbia. The department calculated a dumping rate of 22.16% for Catalyst Paper Corp, and all other producers excluding Resolute Forest Products and White Birch, which were both found to have dumping rates of 0%. The department’s investigation into the alleged dumping began in August 2017, and an International Trade Commission investigation began the following month. The department said a final determination in the investigation will be made in August. It’s the second time the Trump administration has slapped duties on the Canadian forestry industry in recent months. In December, the US International Trade Commission upheld tariffs on softwood lumber after it determined the lumber imported from Canada is subsidized and injures the US industry. Canada filed a wide-ranging complaint to the World Trade Organization in January about the way the US applies punitive tariffs, directly tied to softwood lumber.
Fort McMurray, Alberta - On the anniversary of Environment Minister Catherine McKenna characterizing an international report that concluded governments have failed to protect Wood Buffalo National Park as a “call to action”, a coalition of Indigenous and environmental groups is still waiting for that action.
Justin M. Gaudon, PhD candidate Faculty of Forestry, University of Toronto Canadian forestry is undoubtedly an important discipline, especially in light of climate change, for many ecological, socio-cultural, and commercial reasons, including the large amount of carbon forests hold. Climate change makes forestry education and research in Canada essential because Canada’s forests are changing […]