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Want a simple method for valuing stocks and income earning real estate or timberland? Consider the Dividend Discount Model by dividing next year’s income, assuming it will be earned annually in perpetuity, by a constant discount rate or cost of more…
When talking about timberland investing while having a beer or standing over the hood of a truck, not when signing checks or allocating capital….. A reasonable estimate of a forest’s current economic value equals the standing merchantable volume multiplied by the more…
News flash: we all make errors when analyzing forestry investments. Which are the most common and how can we avoid them? At the end of the day, most analytic errors in forestry relate to the data used – the inputs more…
Attention shoppers! An NPV of zero does not necessarily indicate “bad investment.” Previously, we discussed applications and limitations of using cash-on-cash (COCR) return as a metric for analyzing forestry and timber investments, as well as questions related to internal rate more…
While cash-on-cash (COCR) return – a percentage often used by investors to evaluate income-producing real estate – has limitations when applied to timberland investment performance, it consistently generates interest from institutional investors. Below are questions analysts asked us about COCR: more…
As noted in Part I of this series, cash-on-cash return (COCR) provides one way for real estate investors to quickly compare the profitability of different income-producing properties or investments. However, it has limits for measuring returns or wealth creation over more…
Timberland investors naturally care about the cash flows and distributions from timberland investments over time. These cash flows vary with the products grown, markets served and age distribution of the forest owned. Also, timberland portfolios can be constructed to meet more…
You are an Analyst, a warrior shrouded in mystery and feared for your ruthlessness with Excel. Your actions can throw Investment Committee meetings into chaos, and your existence will shape forest management during this pivotal moment in history. [Inspired by more…
Part I of Timber REITs and the “Dividend Tax” Cliff summarized, in words, the implications to shareholders of publicly-traded timberland-owning REITs if the current dividend tax rate expires on December 31, 2012. This post quantifies the implications and puts into more…
This is the first in a two-part series summarizing implications to timber REIT shareholders from expiry of the current tax provisions specific to dividend income. Fear battles greed once again as chronicled by the business press in the looming “fiscal more…