Rayonier Inc. (RYN), Plum Creek Timber Co. Inc. (PCL), Weyerhaeuser Company (WY): The Last Remaining Play on the Housing Recovery

However, several important changes have taken place that point to a better future for these companies. For instance, Canadian log supplies have been decimated by the pine beetle — which has eaten through and rotted a large portion of British Columbia’s timberland. Both Weyerhaeuser Company (NYSE:WY) and Plum Creek Timber Co. Inc. (NYSE:PCL) are in position to benefit from the Canadian shortfall due to their ownership of timberland in the pacific northwest.

In addition, Plum Creek Timber Co. Inc. (NYSE:PCL) has been liquidating parts of its portfolio — sometimes at rich valuations. However, this practice is not likely to continue for many more years.

But the real upside is reserved for Rayonier Inc. (NYSE:RYN). It is hands down the best business of the three — and it trades at the lowest multiple of average historical return on equity. Further improvements in the housing sector and the economy at large should boost its return on equity, and therefore boost its stock price. Therefore, investors looking to participate in the last part of the housing recovery should bet on Rayonier.

The article The Last Remaining Play on the Housing Recovery originally appeared on Fool.com and is written by Ted Cooper.

Ted Cooper has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Ted is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.