PotlatchDeltic Hikes Dividend; Street Sees 9.1% Upside

PotlatchDeltic (PCH) announced a 2.5% hike in its quarterly dividend to $0.41 per share from $0.40. The manufacturer and seller of lumber, panels and particleboard products said that the new dividend will be paid on Dec. 31 to shareholders of record as of Dec. 15.

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PotlatchDeltic’s annual dividend of $1.64 per share now reflects a dividend yield of 3.6%. The company’s CFO Jerry Richards said, “Since 2012, we have increased our dividend 32% on a per-share basis and our payout has more than doubled.” He added, “we repurchased $41 million of shares at an average price of $34 per share the last two years.”

Earlier in October, the company posted better-than-expected 3Q results. Its earnings of $1.20 per share beat the Street’s estimates of $1.13. Moreover, its revenues of $313 million also topped the consensus estimates of $308.4 million. (See PCH stock analysis on TipRanks)

Following the results, Raymond James analyst Buck Horne maintained a Buy rating and a price target of $51 (10.6% upside potential) on the stock. He said, “Given the secular growth trends we see coming from the U.S. homebuilding industry (as well as repair/remodel demand), coupled with limited incremental domestic sawmill capacity available near-term, we are comfortable raising our lumber price projections to levels that stabilize in the $450/mbf [thousand board feet] range for FY21.”

Meanwhile, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 2 Buys and 1 Hold. The average price target stands at $50.33 and implies upside potential of about 9.1% to current levels. Shares gained 6.6% year-to-date.