D.R. Horton, Inc. (DHI), Lennar Corporation (LEN): Harvard Likes the Housing Market

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About three quarters of Weyerhaeuser Company (NYSE:WY)’s business is pretty directly tied to the housing market. The remainder is connected to the cellulose sector (the fibers used in such things as diapers). The cellulose business held up well through the housing market slump. Of course, the housing-related portion of the business didn’t.

With the new home market seeing signs of improvement, Weyerhaeuser Company (NYSE:WY) is poised to play a big role in a resurgent home building sector. Add in the ability to tap foreign markets, like Asia, and a good chunk of business outside of housing, and the company looks like a reasonably diversified play on a housing recovery.

Plum Creek Timber Co. Inc. (NYSE:PCL) owns 6.4 million acres of timberland. About half is located in less productive areas of the country. However, land sales have been a big factor in recent years. The land sold is often used for new home development. That makes it hard to value Plum Creek Timber Co. Inc. (NYSE:PCL) as a timber company, but gives it some interesting potential if the housing market continues to improve. This one is a much riskier play.

Both timber companies are REITs, but their yields are relatively low after notable price advances. Momentum investors might consider the stocks.

New Homes

While it’s too soon to say that the housing market is recovered, there are definite signs of recovery. Investors can tag along in this Harvard “bright spot” with the above investment options.

The article Harvard Likes the Housing Market originally appeared on Fool.com and is written by Reuben Brewer.

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