PCH  Potlatch Corporation

Exchange

NYSE

Sector

Consumer Services

Industry

Real Estate Investment Trusts

Market Cap.

1.80B

Vuru Grade

15.83/100

Current Price

$44.40
+0.05 (+0.11%)

Growth Price

$19.13
Overvalued by 56.91%

Company Metrics

  • P/E 21.97
  • P/S 2.80
  • P/B 10.57
  • EPS 2.02
  • Cash ROIC 16.00%
  • Cash Ratio -
  • Dividend 1.50 / 3.38 %
  • Avg. Vol. 264,719.00
  • Shares 40.54M
  • Market Cap. 1.80B

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 Mike Covey on Q2 2017 Results - Earnings Call ...
Seeking Alpha - Jul 25, 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 Second Quarter 2017 Conference Call. All lines have been placed on mute to prevent any background noise. After ...
Potlatch Corporation Reports Second Quarter 2017 Results - GlobeNewswire (press release)
Potlatch Corporation reports 2Q net income of $24.3 million - Lesprom Network
Potlatch Corporation subdivision approved
Clearwater Tribune - Jul 26, 2017
A Class S Subdivision (SD20170052) requested by Potlatch Corporation to divide 30.01 acres into 3 lots: Lot A 9.24 acres, Lot B 10.05 acres and Lot C 10.72 acres.
Potlatch Corporation announces campfire burn ban on Idaho property
Clearwater Tribune - Jul 21, 2017
Potlatch Corporation today announced effective Monday, July 24, that no campfires or open burning will be allowed on its property in the State of Idaho due to increasing fire danger in the region.
Potlatch Corp. Reports 350% Gain In Q2 Profit
Markets Insider - Jul 24, 2017
(RTTNews) - Potlatch Corp. (PCH) reported earnings for its second quarter that increased from last year. The company said its bottom line advanced to $24.3 million, or $0.59 per share.
Potlatch Corporation (PCH) Moves Lower on Volume Spike for August 17
Equities.com - Aug 17, 2017
Potlatch Corporation (PCH) traded on unusually high volume on Aug. 17, as the stock lost 4.21% to close at $44.35. On the day, Potlatch Corporation saw 409,494 shares trade hands on 3,919 trades. Considering that the stock averages only a daily volume ...
Analyst Advice And Earnings Insight: Potlatch Corporation (PCH), Calithera ... - Post Analyst
Potlatch Corporation (NASDAQ:PCH) Experiences Lighter than Average Trading Volume
Modern Readers - Aug 7, 2017
Trading was light with 160K shares changing hands by the end of trading on Friday. Shares saw a steep decrease in trading volume of 37.26% under the normal average daily volume.
Potlatch Corporation (PCH) Lowered to “Hold” at Zacks Investment Research - BNB Daily (blog)
Financial Comparison: Potlatch Corporation (NASDAQ:PCH) & Weyerhaeuser (WY)
BNB Daily (blog) - Aug 16, 2017
Potlatch Corporation (NASDAQ: PCH) and Weyerhaeuser (NYSE:WY) are both construction companies, but which is the better business?
Potlatch Corporation (NASDAQ:PCH) Earns Hold Rating from BMO Capital Markets - Sports Perspectives
Potlatch Corporation (PCH) Earns Daily Media Sentiment Score of 0.18
ExpressNewsline - Aug 13, 2017
ILLEGAL ACTIVITY WARNING: "LS Investment Advisors LLC Boosts Position in Potlatch Corporation (PCH)" was first reported by Week Herald and is the property of of Week Herald.
Contrasting Potlatch Corporation (NASDAQ:PCH) and Weyerhaeuser (WY) - BNB Daily (blog)
State of Alaska Department of Revenue Has $935000 Position in Potlatch ... - Sports Perspectives
Potlatch Corporation (NASDAQ:PCH) Experiences Lighter than Usual Trading Volume
Modern Readers - Aug 7, 2017
The value of the investment in Potlatch Corporation decreased from $7,466,000 to $7,214,000 a change of 3.4% since the last quarter.
TIAA CREF Investment Management LLC Sells 5110 Shares of Potlatch Corporation ...
BNB Daily (blog) - Aug 15, 2017
Potlatch Corporation logo TIAA CREF Investment Management LLC cut its position in shares of Potlatch Corporation (NASDAQ:PCH) by 4.4% during the first quarter, according to its most recent Form 13F filing with the SEC.
Is Buying Potlatch Corporation (NASDAQ:PCH) Here Good Idea? - BZ Weekly
Mercer Capital Advisers Inc. Holds Position in Potlatch Corporation (PCH) - Week Herald
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.

$44.40 Current Price

$19.13 Growth Price (DCF)

Overvalued by 56.91%


Growth Rate Assumed by Market: 23.86%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$27.01 Book Price

Overvalued by 39.17%


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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