Tuesday, July 13, 2010

Goldman (NYSE:GS) Says Weyerhaeuser (NYSE:WY) Dividend Good for Stock

On its journey to become a real-estate investment trust (REIT), forest-products company Weyerhaeuser (NYSE:WY) announced it would distribute a special dividend to its shareholders value at $5.6 billion.

“We expect [their] announcement to be a positive for the stock, which has declined 33% since April 23, 2010 versus the S&P 500 decline of 11%, as it removes any uncertainty regarding plans to convert to a REIT. For the long term, we believe the conversion to a REIT will be a positive for [Weyerhaeuser] as it reduces the amount of taxes WY will pay from its core timberland business," said Goldman analysts.

The majority of the dividend will be returned to shareholders in the form of stock.

Investors liked what they heard and bid the company up to a $38.86 close, a gain of $3.02, or 8.43 percent.

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