Newspaper article The Florida Times Union

What's Next for Rayonier Shareholders Is Anyone's Guess

Newspaper article The Florida Times Union

What's Next for Rayonier Shareholders Is Anyone's Guess

Article excerpt

Byline: Mark Basch

Rayonier Inc. reached record highs two weeks ago after a strong second-quarter earnings report. But analysts have a mixed view on the stock's future.

Jacksonville-based Rayonier, which produces specialty cellulose fibers and owns 2.2 million acres of timberland and other real estate, reported second-quarter operating earnings of 67 cents a share, up from 49 cents in the first quarter. That sent its stock from $54.25 before the July 26 earnings report to a high of $57.98 two days later.

But what comes next for shareholders is uncertain. D.A. Davidson & Co. analyst Steven Chercover, who has a "buy" rating, raised his price target on the stock from $58 to $63 after the earnings report, citing an increase in timberland values and the potential for higher dividend payments.

"The cash being generated by operations exceeds the company's current dividend payout -- the return to shareholders will likely increase in 2006," Chercover said in a research note.

However, Smith Barney analyst Chip Dillon maintained his "sell" rating and $48 price target.

"We base our rating solely due to valuation concerns as we agree with the positive steps management has taken in recent years to enhance shareholder value," Dillon's report said.

A third analyst, Mark Weintraub of Buckingham Research Group, rates Rayonier as "neutral." So it's anyone's guess.


Landstar System Inc.'s stockholders have had a good ride in this decade, with the stock rising 588 percent from 2000 through 2004. But those gains were only on paper. The stockholders would have had to sell their shares to get any tangible benefit from the company's performance.

But that's changing. Landstar's board of directors has declared its first quarterly dividend of 2.5 cents a share, payable on Aug. 31 to shareholders of record on Aug. 17.

"We are pleased that Landstar can return some of its excess cash flow to its stockholders while also making Landstar more attractive to a broader range of investors who share our confidence in the company's future," said a statement by CEO Henry Gerkens. …

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