PCH  Potlatch Corporation

Exchange

NYSE

Sector

Consumer Services

Industry

Real Estate Investment Trusts

Market Cap.

1.84B

Vuru Grade

15.83/100

Current Price

$45.05
-1.90 (-4.05%)

Growth Price

$18.99
Overvalued by 57.84%

Company Metrics

  • P/E 66.64
  • P/S 3.08
  • P/B 12.02
  • EPS 0.27
  • Cash ROIC 16.00%
  • Cash Ratio -
  • Dividend 1.50 / 3.21 %
  • Avg. Vol. 318,397.00
  • Shares 40.84M
  • Market Cap. 1.84B

Company Description

Potlatch Corporation operates as a real estate investment trust (REIT) that owns and manages timberlands located in Arkansas, Idaho, Minnesota and Wisconsin in the United States. The Resource Management Division manages its timberlands, harvests timber, procures other wood fiber, sells logs and leases land for hunting and other recreational activity. The Real Estate Division develops and sells lan... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Potlatch Corporation's (PCH) CEO Michael Covey on Q1 2017 Results - Earnings ...
Seeking Alpha - 7 hours ago
Good morning. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Potlatch First Quarter 2017 Conference Call. [Operator Instructions]. I would now like to turn the call over to Mr ...
Potlatch Corporation Reports First Quarter 2017 Results
Nasdaq - Apr 26, 2017
SPOKANE, Wash., April 26, 2017 (GLOBE NEWSWIRE) -- Potlatch Corporation (Nasdaq:PCH) today reported net income of $16.9 million, or $0.41 per diluted share, on revenues of $149.7 million for the quarter ended March 31, 2017.
Potlatch Corp. Is Trading Significantly Below NAV
Seeking Alpha - Oct 6, 2015
Potlatch Corporation (NASDAQ:PCH) is a real estate investment trust, or REIT, with approximately 1.6 million acres of timberlands in Alabama (100,000 acres), Arkansas (409,000 acres), Idaho (791,000 acres), Minnesota (172,000 acres) and Mississippi ...
Potlatch Corporation Reports Fourth Quarter and Full Year 2016 Results
GlobeNewswire (press release) - Jan 31, 2017
SPOKANE, Wash., Jan. 31, 2017 (GLOBE NEWSWIRE) -- Potlatch Corporation (Nasdaq:PCH) today reported net income of $14.4 million, or $0.35 per diluted share, on revenues of $155.7 million for the quarter ended December 31, 2016.
Potlatch Corporation's (PCH) CEO Michael Covey on Q4 2016 Results - Earnings ...
Seeking Alpha - Jan 31, 2017
Good morning. My name is Karen and I will be your conference operator today. At this time, I would like to welcome everyone to the Potlatch Fourth Quarter 2016 Conference Call. All lines have been placed on mute to prevent any background noise. After ...
Potlatch Corporation's (PCH) CEO Michael Covey on Q3 2016 Results - Earnings ...
Seeking Alpha - Oct 21, 2016
Good morning. My name is Victoria and I will be your conference operator today. At this time, I would like to welcome everyone to the Potlatch Third Quarter 2016 Conference Call. All lines have been placed on mute to prevent any background noise. After ...
Small fire at Potlatch Corporation
Marquette Mining Journal - Apr 18, 2017
K.I. SAWYER - No injuries were reported following a small fire that broke out at about 10 p.m. Monday at the Potlatch Corporation, a lumber mill at K.I. Sawyer. A company spokesman said a fire broke out on an exterior wall at the mill, but was ...
Potlatch Corporation (PCH) Moves Lower on Volume Spike for April 25
Equities.com - Apr 25, 2017
Potlatch Corporation (PCH) traded on unusually high volume on Apr. 25, as the stock lost 3.83% to close at $45.25. On the day, Potlatch Corporation saw 825,230 shares trade hands on 7,120 trades. Considering that the stock averages only a daily volume ...
Potlatch Corporation (PCH) Releases Earnings Results, Beats Expectations By $0 ... - Highland Mirror
A Look Ahead For 2 Stocks: Potlatch Corporation (PCH), FalconStor Software ... - Post Analyst
Potlatch Corporation (PCH) Ex-Dividend Date Scheduled for March 03, 2017
Nasdaq - Mar 2, 2017
Potlatch Corporation ( PCH ) will begin trading ex-dividend on March 03, 2017. A cash dividend payment of $0.375 per share is scheduled to be paid on March 31, 2017.
BRIEF-Potlatch Corp reports Q1 earnings per share $0.41
Reuters - Apr 26, 2017
Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for PCH to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate PCH's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$45.05 Current Price

$18.99 Growth Price (DCF)

Overvalued by 57.84%


Growth Rate Assumed by Market: 24.43%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$26.94 Book Price

Overvalued by 40.21%


Varying Cash Return on Invested Capital over the past 5 years

PCH has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

PCH has created $16.00 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 74.35M 79.97M -281.81M 41.28M 96.25M
divided by
Invested Capital 138.64M 204.15M 1.04B 1.02B 927.68M
Cash ROIC 53.62% 39.17% -27.22% 4.06% 10.38%

Inconsistent Return on Equity over the past 5 years

PCH has generated adequate returns with capital that shareholders have invested. However, there has been some inconsistency from year-to-year. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

PCH has generated $12.50 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income - - 89.91M 31.71M 10.94M
divided by
Stockholders' Equity 138.64M 204.15M 225.07M 203.74M 156.27M
Return on Equity - - 39.95% 15.57% 7.00%

Good Business Performance over the past 10 years

It's likely PCH has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is PCH has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

PCH has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 55.70M -28.85M 96.35M 120.03M 71.78M 74.35M 79.97M -281.81M 41.28M 96.25M

Weak Balance Sheet

PCH's financial position is not ideal. The key is to check whether PCH is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 1.52B 938.32M 823.57M 781.71M 746.22M - - 1.04B 1.02B 927.68M
Current Liabilities - - - - - - - - - -
Total Liabilities 938.87M 740.09M 593.78M 577.27M 604.08M - - 810.36M 812.88M 771.41M
Stockholder' Equity 578.34M 198.23M 229.79M 204.44M 142.14M 138.64M 204.15M 225.07M 203.74M 156.27M
Current Ratio - - - - - - - - - -
TL-to-TA 0.62 0.79 0.72 0.74 0.81 - - 0.78 0.80 0.83

Low or No Reinvestment of Profits over the past 10 years

PCH has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to PCH operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 123.78M -7.75M -11.55M -52.73M -86.39M -94.20M -75.56M -43.59M -72.98M -128.78M
Retained Earnings Growth - -106.26% -49.12% -356.60% -63.82% -9.04% 19.79% 42.31% -67.44% -76.45%

Competitive Industry over the past 10 years

PCH is likely operating in an industry with medium to low barriers to entry. This may mean that PCH doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that PCH invests heavily in R&D and Sales, General & Administrative expenses.

Only $6.93 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 56.43M 52.64M 77.33M 40.39M 40.27M - - 89.91M 31.71M 10.94M
divided by
Revenue 1.65B 439.96M 476.17M 539.45M 497.42M 525.13M 570.29M 606.95M 575.34M 599.10M
Net Profit Margin 3.41% 11.96% 16.24% 7.49% 8.09% - - 14.81% 5.51% 1.83%

Weak Pricing Power over the past 10 years

PCH is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that PCH has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue 1.65B 439.96M 476.17M 539.45M 497.42M 525.13M 570.29M 606.95M 575.34M 599.10M
Gross Margin - - - - - - - - - -

High Capital Intensity over the past 10 years

PCH spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

118.03% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 90.07M 64.08M 15.70M 5.22M 5.34M 5.64M 10.28M 413.18M 32.73M 5.87M
divided by
Net Income 56.43M 52.64M 77.33M 40.39M 40.27M - - 89.91M 31.71M 10.94M
Capital Expenditure Ratio 159.61% 121.74% 20.30% 12.91% 13.26% - - 459.55% 103.21% 53.63%

Inconsistent Dividend History over the past 10 years

PCH has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 77.46M - - 81.58M 73.92M - - 57.85M 61.02M 60.84M
divided by
Shares Outstanding 39.46M 39.80M 39.97M 40.22M 40.38M 40.55M 40.71M 40.89M 40.99M 41.03M
Dividend Paid Per Share 1.96 - - 2.03 1.83 - - 1.41 1.49 1.48
Price at Year End 28.94 21.00 28.86 31.01 31.11 38.52 41.86 42.52 30.98 41.65
Dividend Yield 6.78% - - 6.54% 5.88% - - 3.33% 4.81% 3.56%

No History of Stock Buybacks over the past 10 years

We're neutral on this. It's not necessarily good or bad that PCH hasn't initiated a stock buyback.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 39.46M 39.80M 39.97M 40.22M 40.38M 40.55M 40.71M 40.89M 40.99M 41.03M
Stock Bought Back - -0.86% -0.43% -0.61% -0.41% -0.42% -0.38% -0.45% -0.23% -0.11%
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