Weyerhaeuser

Methodology

This EPS-based method has fundamental limitations for Weyerhaeuser as a timber REIT, since depreciation distorts reported earnings despite stable cash flows from timberland ownership and lumber production. Investors should use FFO (Funds From Operations) or Adjusted EBITDA-based models instead of P/E ratios, as these metrics better reflect the economic reality of timberland appreciation and sustainable harvest levels. The Peter Lynch framework is not appropriate for timber REIT valuation without significant modifications.

Methodology

Traditional PEG analysis is problematic for Weyerhaeuser given GAAP depreciation distortions and the cyclical nature of lumber prices that make EPS growth highly volatile and unrelated to timberland value appreciation. If using PEG, investors must account for housing cycle impacts on lumber pricing and substitute cash flow metrics for EPS. Timberland NAV analysis and housing start correlation provide more reliable valuation frameworks for timber REITs than traditional PEG ratios.

Methodology

While Weyerhaeuser pays a meaningful dividend as a timber REIT, PEGY calculations using GAAP earnings remain misleading due to depreciation distortions and lumber price volatility that creates unreliable EPS baselines. Investors should evaluate dividend sustainability by examining adjusted EBITDA and free cash flow rather than relying on EPS-based PEGY. For timber REITs like Weyerhaeuser, dividend yield combined with timberland NAV and housing cycle positioning provides better total return analysis than traditional PEGY frameworks.