Domtar Makes Paper For Print, Special, & Health Uses
This week I'm seeking a high-yield and growing stock from the basic materials sector.
That materials sector includes thirteen industries all related to mining, making and delivering essential commodities. The industries are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals and minerals; paper; silver; specialty chemicals; steel.
Today I'm reviewing a mid-cap paper and paper products firm named Domtar Corporation. Its trading ticker symbol is UFS.
Domtar Corp designs, manufactures, markets, and distributes various fiber-based products. It offers communication papers, specialty and packaging papers, and absorbent hygiene products.
The company operates in two segments, Pulp and Paper, and Personal Care. The company offers business papers, including copy and electronic imaging papers for use with inkjet and laser printers, photocopiers, and plain-paper fax machines, as well as computer papers, preprinted forms, and digital papers for office and home use. It also provides commercial printing and publishing papers.
In addition, the company offers papers for thermal and flexible packaging, food and medical packaging, medical gowns and drapes, sandpaper backing, carbonless printing, label, and other coating and laminating applications. Further, it provides softwood, fluff, and hardwood Kraft products for various end products. Additionally, the company offers absorbent hygiene products, which comprise adult incontinence products.
It serves merchants, retail outlets, stationers, printers, publishers, converters, and end-users.
The company was incorporated in 2006 and is based in Fort Mill, South Carolina
I use three key data points to gauge the value of any dividend equity or fund likeDomtar Corporation (UFS):
(1) Price
(2) Dividends
(3) Returns
Besides those three, four more keys will finally unlock an equity or fund in which to invest.
But those first three primary keys, best tell whether a company has made, is making, and will make money.
UFS Price
UFS's price per share was $52.02 at yesterday's market close. A year ago its price was $40.06 for a gain of $11.96 per share.
Assuming Domtar's price will trade in the range of $40 to $65 next year, perhaps that $11.96 gain could repeat again in the coming year and move UFS's current $52.02 price to $64 by late-August, 2019.
UFS Dividends
Domtar's most recent quarterly dividend was $0.435 declared August 8th and payable October 15th. At this most recent quarterly pay rate,UFS's annual dividend is calculated at $1.74 yielding 3.34% at yesterday's closing $52.02 price.
Gains For UFS?
Adding the $1.74 estimated annual dividend to the nearly $12.00 year over year price gain for UFS makes a $13.74gross annual per share gain, which will be reduced by costs to trade the shares.
A little under $1,000.00 invested today at the $52.02 recent price buys 19 Domtar Corporation (UFS) shares.
A $10 broker fee paid half at purchase and half at sale costs $0.53 per share, subtracting that $0.53 brokerage cost from the estimated $13.74 gross gain leaves a net gain of $13.21 X 19 shares = $250.99 or a 25.1% net gain on a $988.39 investment.
Therefore, Domtar Corporation whose trading ticker symbol is UFS, now shows a possible 25.1% net gain including a 3.34% dividend yield.
Fourteen brokers cover this stock:
One says "buy" UFS
One says UFS will "outperform" its peers.
Eleven analysts sat "Hold" your position on UFS.
Oh! and one says "sell" UFS!
Thus, the analyst consensus recommendation number is 2.9 or "hold".
The median price target set by those fourteen brokers is $2.00 under the current price and $14 under my estimated upside number.
So, you could look at all those various numbers this way, Domtar Corporation (UFS) has made money, is making money, and could net a 25% net annual gain including a 3.34% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if Domtar Corporation (UFS) is worth your time and money.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...
more