403 Forbidden


nginx
403 Forbidden

403 Forbidden


nginx
Follow us:
403 Forbidden

403 Forbidden


nginx

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

July 7, 2009 at 10:05 AM

If a dividend falls in Weyerhaeuser’s forest, will anyone hear it?

Top of the News: I’m going to stay away from Michael Jackson and Boeing this morning. News you might miss includes Weyerhaeuser sawing its dividend down by 80 percent, to five cents a share.

Most reports talk about the venerable Federal Way company as if it was your father’s timber outfit: How it has been hurt by weak demand for forest products, especially with the collapse of the housing market. That’s true in part.

But Weyerhaeuser was shedding its old integrated wood products silhouette and slashing jobs at headquarters. It actually sailed into a perfect storm when it diversified into house building.

CEO Dan Fulton came from the real-estate unit, not the forest products side. The company’s building units, including Quadrant Homes, have been smashed in the real-estate crash, which has been especially bad in the exurban areas Weyco tended to focus on.

There’s continued speculation about Weyerhaeuser converting to a real estate investment trust. This has some tax advantages, but the idea had much more appeal in the halcyon days of the housing boom. Investors in a REIT would be salivating over turning timberland into high-profit subdivisions and faux wilderness estates. That market is unlikely to revive anytime soon, leaving open the question: What’s the end-game for Weyerhaeuser?

Meanwhile, old-time investors and those looking more for dividends and stability than a REIT play will be further antagonized.

The Back Story: Businesses and government are still hiring despite the recession. The hiring rate, however, is way too low to overcome the rate of job losses.

The federal Bureau of Labor Statistics reports that the number of job openings nationally was 2.6 million at the end of May. The rate of hiring was the lowest since the data began to be collected in 2000. Retail has seen a modest uptick. Hospitality has suffered a significant decline. Year-over-year in May, most industries suffered major declines in hiring.

Today’s Econ Haiku:

Next stop for Boeing

A trip to Argentina?

Watch that S.C. vibe

Comments | More in

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


403 Forbidden

403 Forbidden


nginx
403 Forbidden

403 Forbidden


nginx