Plum Creek Timber Co. Inc. (PCL), Arctic Cat Inc (ACAT), Sturm, Ruger & Company (RGR): A-Hunting We Will Go for Yield

Page 1 of 2

After their last analyst/investor day, Cabela’s (NYSE:CAB) CEO Thomas Milner invited Wall Street analysts to go hunting. Picturing Wall Street analysts in camo and orange vests reminds me of the scene in Mad Men where ad guy Ken goes hunting with the GM execs and they shoot him in the eye. “You’ll shoot yer eye out!” indeed.

Plum Creek Timber Co. Inc. (NYSE:PCL)Gun-toting analysts aside, hunting is big business and several stocks benefit. Although the number of hunters fell by 10% at the beginning of this century, 6% of Americans over 16 still hunt, whether by bow or gun. Figures on the actual number of hunters vary widely from 15 million to 45 million Americans. These numbers don’t include anglers, campers, or paddlers so the total number of outdoor sportsmen (and women) is likely higher.

Several stocks benefit. Three of these offer yield and they are: Plum Creek Timber Co. Inc. (NYSE:PCL), Arctic Cat Inc (NASDAQ:ACAT), and Sturm, Ruger & Company (NYSE:RGR)

Timberrr!

Plum Creek Timber Co. Inc. (NYSE:PCL) offers leases for recreational hunting clubs. Some leases also allow food plots and camping. Most of the leases are in the South, the Pacific Northwest, and Great Lakes area. This is a small part of its revenue stream but it shows they are monetizing every inch of timberland.

You probably figured Plum Creek Timber Co. Inc. (NYSE:PCL) was a play on housing with all its timber and it is, but the company owns 6.4 million acres and is involved in mineral extraction, natural gas production, communication, and transportation as well as its main business of timber management.

Plum Creek Timber Co. Inc. (NYSE:PCL) is actually a REIT and so pays a generous dividend of 3.90%. The stock is up only 18.76% in the last year and trades at 6 times book at a trailing P/E of 32.50 and a forward P/E of 27.63.

Analysts are growing slightly more bullish with an upgrade by DA Davidson on June 19 to neutral. Analysts have a $51 median price target.

Shooting out the lights

Sturm, Ruger & Company (NYSE:RGR) is a firearms manufacturer and after Smith & Wesson Holding Corporation (NASDAQ:SWHC)’s beat on both top and bottom line, things look good for Sturm Ruger’s earnings on July 31. Analysts have been raising their EPS estimates for the gunmakers over the last few months and Sturm Ruger may be a better buy if it disappoints with increasingly lofty expectations.

It offers a 4.10% yield and a trailing P/E of 11.92 with no debt. Sturm, Ruger & Company (NYSE:RGRhas had 22.65% revenue growth over the last three years. The stock has outperformed the S&P 500 with a gain of 31% over the last year and that was on top of gains from last year when the gunmakers had so much demand that there were supply shortages.

As Fellow Fool Dan Dzombak notes, the company is shareholder-friendly, paying out a variable dividend that can soar in good times and while lower in bad times, doesn’t cripple the company’s operations.

Caveats with Sturm, Ruger & Company (NYSE:RGR) are the same as with Smith & Wesson: headline risk and analysts’ predictions of decelerating EPS growth. Both companies have proved analysts wrong over the last two years with applications for background checks for gun permits at all time highs. But, headline risk explains the high short interest at 23.40%

Ruger has a close relationship with Cabelas Inc (NYSE:CAB)’s offering its Cabela’s Club members special events at its Ruger Gunsite Academy.

Elkburger, anyone?

Speaking of Cabelas Inc (NYSE:CAB)’s, it is one of my favorite names and if it had a yield, it would be an almost perfect stock. If you have never gone to a flagship store, I highly recommend it. Maybe take a free archery or sporting class while you’re there. Don’t forget to try the elkburger.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!