Boosting shareholders’ wealth, Rayonier Inc.’s RYN board of directors approved a new $300 million share repurchase authorization and declared a one-time, special dividend of $1.80 per common share.

RYN’s New Repurchase Authorization

Share repurchases are an important component of this timberland real estate investment trust (REIT) company’s capital allocation strategy. This new authorization replaces its existing $100 million share repurchase authorization. The new repurchase program is not bound by any time frame and can be suspended for periods or discontinued whenever deemed necessary.

The company had approximately 148.5 million common shares and 2 million operating partnership units outstanding as of Nov. 29, 2024.

Per Mark McHugh, president & CEO of Rayonier, “Our new share repurchase authorization provides us additional capacity to execute on share repurchases, demonstrating our conviction in the underlying net asset value of the company amid the continued disconnect between public and private timberland values.”

RYN’s Special Dividend

The company will distribute a special dividend of $1.80 per common share, consisting of a combination of cash and its common shares. The one-time dividend will be paid on Jan. 30, 2025 to shareholders on record as of Dec. 12, 2024.

The special dividend is being issued in relation to the taxable gains generated from the company's $495 million timberland dispositions completed in the fourth quarter of 2024. This aligns with its previously announced plan in November 2023, for asset disposition and capital structure realignment.

The cash component of the special dividend, excluding any cash paid for fractional shares, will be limited to a maximum of 25% of the total distribution, with the remaining amount payable in the form of the company’s common shares. Rayonier expects that this dividend will be subject to taxation, irrespective of whether it is received as cash or common shares.

Usually, special dividends are paid out by REITs on capital gains from the sale of assets to avoid paying taxes. The U.S. law requires these companies to distribute at least 90% of their taxable income to their shareholders annually in the form of dividends.

Apart from this special dividend, on Oct. 21, Rayonier’s board of directors announced regular quarterly cash dividend per share of 28.50 cents on its common stock for the fourth quarter of 2024. The dividend will be paid out on Dec. 31, to shareholders on record as of Dec. 17, 2024.

Summing Up

Solid dividend payouts are arguably the biggest enticement for REITs investors, and Rayonier remains committed to that. The recent dispositions made by the company provide them with financial flexibility to enhance long-term shareholder value.

Shares of this Zacks Rank #4 (Sell) company have gained 4.3% over the past six months compared with the industry’s growth of 11.7%.

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Stocks to Consider

Some better-ranked stocks from the REIT sector are Alpine Income Property Trust PINE and Gladstone Commercial GOOD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Alpine Income’s 2024 FFO per share has moved 6.1% upward in the past month to $1.70.

The Zacks Consensus Estimate for Gladstone Commercial’s current-year FFO per share has moved 2.1% northward over the past month to $1.43.

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