Taking what I’m sure is a mini-break from fires.
In our discussion of timber companies who own land (and taxes they pay), I thought it might be interesting to folks on the blog to talk a little about TIMOs and REITS, which don’t get as much press in the west. For example, I received this in July in my Morningstar email..you probably can’t see it unless you are a member.
So perhaps the landowning timber company in the west will become as rare as .. the spotted owl. If we want to be a country that has forest industry, then small private and feds in the west may have to step up in terms of supply. If we want to get it from Canada, I’m sure our northern neighbors will be happy to oblige. A perhaps ironic end to years of Canadian lumber disputes.
Over the past three- and five-year periods, MeadWestvaco (MWV) shares have underperformed the U.S. packaging peer group. Unlike most of its competitors, which have shed legacy land holdings and noncore businesses to focus on packaging, MeadWestvaco still owns more than 600,000 acres of land, actively engages in property development, and runs a specialty chemical business that is largely unrelated to the core packaging business.
We consider the specialty chemical and real estate operations to be a distraction from the core business and believe they are a key reason that the packaging business has struggled in recent years. We think MeadWestvaco shareholders would be best served by an outright sale of the specialty chemical business and a tax-free real estate investment trust spin-off of the land and property management business.
Stock value is important, therefore analysts are important, therefore..
Here’s an introduction to the issue by Dovetail Partners.. but you can search on “TIMOs and REITS forest impacts” and find a variety of scholarly and non-scholarly articles.