Louisiana-Pacific Bumps up Quarterly Dividend by 12.5%

Louisiana-Pacific Corporation (LPX) raised its quarterly cash dividend by 12.5% to $0.18 per share. Prior to this, the manufacturer of engineered wood building products for builders, remodelers, and homeowners globally, increased its dividend to $0.16 per share from $0.145 this February.

Louisiana-Pacific announced that the new dividend will be paid on September 1, to shareholders of record as of August 10.

The company’s annual dividend of $0.72 per share now reflects a dividend yield of 1.3%.

On August 3, Louisiana-Pacific will report its financial results for the second quarter of 2021. (See Louisiana-Pacific stock charts on TipRanks)

Last month, Goldman Sachs analyst Susan Maklari initiated coverage of the stock with a Sell rating and a price target of $54 (2.6% downside potential).

Maklari believes that wood products are likely to face near-term pressures, and therefore maintained a cautious outlook on Louisiana-Pacific.

In a note to investors, the analyst said that with a ramp-up of capacity, a decline in input costs, and moderate consumer demand in the near term, lumber and related commodity prices are expected to reduce. Therefore, given this operating environment, she considers the stocks, which are mainly exposed to the commodity, to underperform.

The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating. That’s based on 3 analysts suggesting a Buy, 2 analysts recommending a Hold, and 1 analyst suggesting a Sell. The average Louisiana-Pacific price target of $77.33 implies a 39.5% upside potential to current levels. Shares have increased 50.1% so far this year.

Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, the LPX stock is at risk mainly from three factors: Regulatory and Legal, Production, and Macro & Political, which contribute 23%, 23%, and 18%, respectively, to the total risk for the stock. Within the Regulatory and Legal risk category, Louisiana-Pacific has 5 risks.