Intrinsic value of Rayonier - RYN

Previous Close

$27.80

  Intrinsic Value

$145.08

stock screener

  Rating & Target

str. buy

+422%

  Value-price divergence*

+5000%

Previous close

$27.80

 
Intrinsic value

$145.08

 
Up/down potential

+422%

 
Rating

str. buy

 
Value-price divergence*

+5000%

Our model is not good at valuating stocks of financial companies, such as RYN.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of RYN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  44.59
  38.50
  35.15
  32.14
  29.42
  26.98
  24.78
  22.80
  21.02
  19.42
  17.98
  16.68
  15.51
  14.46
  13.52
  12.66
  11.90
  11.21
  10.59
  10.03
  9.53
  9.07
  8.67
  8.30
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
Revenue, $m
  788
  1,091
  1,475
  1,949
  2,522
  3,203
  3,997
  4,908
  5,940
  7,093
  8,369
  9,765
  11,279
  12,911
  14,656
  16,511
  18,476
  20,547
  22,722
  25,000
  27,382
  29,866
  32,454
  35,148
  37,948
  40,860
  43,886
  47,030
  50,297
  53,694
  57,226
Variable operating expenses, $m
 
  297
  401
  530
  686
  871
  1,087
  1,335
  1,616
  1,929
  2,276
  2,656
  3,068
  3,512
  3,986
  4,491
  5,025
  5,589
  6,180
  6,800
  7,448
  8,124
  8,828
  9,560
  10,322
  11,114
  11,937
  12,792
  13,681
  14,605
  15,565
Fixed operating expenses, $m
 
  335
  344
  352
  361
  370
  379
  389
  398
  408
  419
  429
  440
  451
  462
  474
  485
  498
  510
  523
  536
  549
  563
  577
  591
  606
  621
  637
  653
  669
  686
Total operating expenses, $m
  533
  632
  745
  882
  1,047
  1,241
  1,466
  1,724
  2,014
  2,337
  2,695
  3,085
  3,508
  3,963
  4,448
  4,965
  5,510
  6,087
  6,690
  7,323
  7,984
  8,673
  9,391
  10,137
  10,913
  11,720
  12,558
  13,429
  14,334
  15,274
  16,251
Operating income, $m
  256
  459
  730
  1,067
  1,475
  1,962
  2,530
  3,184
  3,926
  4,756
  5,674
  6,680
  7,772
  8,948
  10,207
  11,547
  12,965
  14,460
  16,031
  17,678
  19,398
  21,193
  23,064
  25,010
  27,035
  29,140
  31,327
  33,601
  35,964
  38,420
  40,975
EBITDA, $m
  371
  461
  732
  1,069
  1,479
  1,966
  2,536
  3,191
  3,934
  4,765
  5,685
  6,692
  7,786
  8,965
  10,226
  11,568
  12,989
  14,487
  16,061
  17,710
  19,434
  21,232
  23,106
  25,056
  27,084
  29,193
  31,384
  33,662
  36,029
  38,490
  41,049
Interest expense (income), $m
  36
  39
  57
  80
  109
  143
  184
  232
  286
  348
  417
  494
  577
  668
  766
  871
  982
  1,100
  1,224
  1,354
  1,491
  1,633
  1,782
  1,937
  2,099
  2,267
  2,441
  2,623
  2,811
  3,007
  3,211
Earnings before tax, $m
  223
  420
  673
  986
  1,367
  1,819
  2,346
  2,953
  3,640
  4,408
  5,257
  6,186
  7,194
  8,280
  9,441
  10,676
  11,983
  13,361
  14,808
  16,323
  17,907
  19,560
  21,281
  23,073
  24,936
  26,873
  28,886
  30,978
  33,152
  35,413
  37,764
Tax expense, $m
  5
  113
  182
  266
  369
  491
  634
  797
  983
  1,190
  1,419
  1,670
  1,942
  2,236
  2,549
  2,883
  3,235
  3,607
  3,998
  4,407
  4,835
  5,281
  5,746
  6,230
  6,733
  7,256
  7,799
  8,364
  8,951
  9,562
  10,196
Net income, $m
  212
  307
  491
  720
  998
  1,328
  1,713
  2,156
  2,657
  3,218
  3,837
  4,516
  5,252
  6,044
  6,892
  7,794
  8,748
  9,753
  10,810
  11,916
  13,072
  14,279
  15,535
  16,843
  18,203
  19,617
  21,087
  22,614
  24,201
  25,851
  27,568

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  86
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,686
  3,602
  4,868
  6,432
  8,325
  10,571
  13,190
  16,198
  19,604
  23,411
  27,620
  32,227
  37,226
  42,609
  48,368
  54,493
  60,977
  67,811
  74,990
  82,510
  90,369
  98,568
  107,109
  115,998
  125,242
  134,851
  144,837
  155,214
  165,998
  177,208
  188,865
Adjusted assets (=assets-cash), $m
  2,600
  3,602
  4,868
  6,432
  8,325
  10,571
  13,190
  16,198
  19,604
  23,411
  27,620
  32,227
  37,226
  42,609
  48,368
  54,493
  60,977
  67,811
  74,990
  82,510
  90,369
  98,568
  107,109
  115,998
  125,242
  134,851
  144,837
  155,214
  165,998
  177,208
  188,865
Revenue / Adjusted assets
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
Average production assets, $m
  11
  14
  19
  25
  33
  42
  52
  64
  77
  92
  109
  127
  147
  168
  191
  215
  240
  267
  295
  325
  356
  388
  422
  457
  493
  531
  571
  611
  654
  698
  744
Working capital, $m
  73
  26
  35
  47
  61
  77
  96
  118
  143
  170
  201
  234
  271
  310
  352
  396
  443
  493
  545
  600
  657
  717
  779
  844
  911
  981
  1,053
  1,129
  1,207
  1,289
  1,373
Total debt, $m
  1,062
  1,510
  2,115
  2,863
  3,767
  4,841
  6,093
  7,531
  9,158
  10,978
  12,990
  15,192
  17,582
  20,155
  22,908
  25,836
  28,935
  32,201
  35,633
  39,228
  42,984
  46,904
  50,986
  55,235
  59,654
  64,247
  69,020
  73,980
  79,135
  84,494
  90,065
Total liabilities, $m
  1,274
  1,722
  2,327
  3,075
  3,979
  5,053
  6,305
  7,743
  9,370
  11,190
  13,202
  15,404
  17,794
  20,367
  23,120
  26,048
  29,147
  32,413
  35,845
  39,440
  43,196
  47,116
  51,198
  55,447
  59,866
  64,459
  69,232
  74,192
  79,347
  84,706
  90,277
Total equity, $m
  1,412
  1,880
  2,541
  3,358
  4,346
  5,518
  6,885
  8,455
  10,233
  12,220
  14,417
  16,822
  19,432
  22,242
  25,248
  28,445
  31,830
  35,397
  39,145
  43,070
  47,173
  51,453
  55,911
  60,551
  65,377
  70,392
  75,605
  81,022
  86,651
  92,503
  98,587
Total liabilities and equity, $m
  2,686
  3,602
  4,868
  6,433
  8,325
  10,571
  13,190
  16,198
  19,603
  23,410
  27,619
  32,226
  37,226
  42,609
  48,368
  54,493
  60,977
  67,810
  74,990
  82,510
  90,369
  98,569
  107,109
  115,998
  125,243
  134,851
  144,837
  155,214
  165,998
  177,209
  188,864
Debt-to-equity ratio
  0.752
  0.800
  0.830
  0.850
  0.870
  0.880
  0.880
  0.890
  0.890
  0.900
  0.900
  0.900
  0.900
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
Adjusted equity ratio
  0.510
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  212
  307
  491
  720
  998
  1,328
  1,713
  2,156
  2,657
  3,218
  3,837
  4,516
  5,252
  6,044
  6,892
  7,794
  8,748
  9,753
  10,810
  11,916
  13,072
  14,279
  15,535
  16,843
  18,203
  19,617
  21,087
  22,614
  24,201
  25,851
  27,568
Depreciation, amort., depletion, $m
  115
  1
  2
  3
  3
  4
  5
  6
  8
  9
  11
  13
  15
  17
  19
  21
  24
  27
  30
  33
  36
  39
  42
  46
  49
  53
  57
  61
  65
  70
  74
Funds from operations, $m
  194
  308
  493
  723
  1,001
  1,332
  1,718
  2,162
  2,665
  3,227
  3,848
  4,528
  5,267
  6,061
  6,911
  7,815
  8,772
  9,780
  10,839
  11,949
  13,108
  14,318
  15,578
  16,889
  18,253
  19,670
  21,144
  22,675
  24,267
  25,921
  27,642
Change in working capital, $m
  -10
  7
  9
  11
  14
  16
  19
  22
  25
  28
  31
  34
  36
  39
  42
  45
  47
  50
  52
  55
  57
  60
  62
  65
  67
  70
  73
  75
  78
  82
  85
Cash from operations, $m
  204
  301
  484
  711
  987
  1,315
  1,699
  2,140
  2,640
  3,199
  3,818
  4,495
  5,230
  6,022
  6,869
  7,771
  8,725
  9,730
  10,787
  11,894
  13,051
  14,258
  15,515
  16,824
  18,185
  19,600
  21,071
  22,600
  24,188
  25,840
  27,557
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -3
  -3
  -4
  -5
  -6
  -8
  -9
  -11
  -13
  -15
  -17
  -19
  -21
  -24
  -27
  -30
  -33
  -36
  -39
  -42
  -46
  -49
  -53
  -57
  -61
  -65
  -70
New CAPEX, $m
  -432
  -4
  -5
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -17
  -18
  -20
  -21
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
Cash from investing activities, $m
  -283
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -19
  -23
  -26
  -29
  -33
  -36
  -40
  -43
  -47
  -51
  -55
  -60
  -64
  -68
  -73
  -77
  -82
  -87
  -92
  -98
  -103
  -109
  -116
Free cash flow, $m
  -79
  296
  478
  703
  977
  1,303
  1,685
  2,123
  2,620
  3,176
  3,792
  4,466
  5,198
  5,986
  6,830
  7,727
  8,678
  9,679
  10,732
  11,835
  12,987
  14,190
  15,443
  16,747
  18,103
  19,513
  20,979
  22,502
  24,085
  25,730
  27,442
Issuance/(repayment) of debt, $m
  238
  480
  605
  748
  905
  1,074
  1,252
  1,438
  1,628
  1,820
  2,012
  2,202
  2,390
  2,573
  2,753
  2,928
  3,099
  3,267
  3,432
  3,595
  3,757
  3,919
  4,083
  4,249
  4,419
  4,593
  4,773
  4,960
  5,155
  5,358
  5,572
Issuance/(repurchase) of shares, $m
  1
  215
  170
  97
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  237
  695
  775
  845
  905
  1,074
  1,252
  1,438
  1,628
  1,820
  2,012
  2,202
  2,390
  2,573
  2,753
  2,928
  3,099
  3,267
  3,432
  3,595
  3,757
  3,919
  4,083
  4,249
  4,419
  4,593
  4,773
  4,960
  5,155
  5,358
  5,572
Total cash flow (excl. dividends), $m
  157
  991
  1,252
  1,547
  1,882
  2,377
  2,937
  3,561
  4,248
  4,996
  5,804
  6,668
  7,587
  8,559
  9,583
  10,655
  11,777
  12,946
  14,164
  15,429
  16,744
  18,109
  19,526
  20,996
  22,522
  24,106
  25,752
  27,462
  29,239
  31,089
  33,013
Retained Cash Flow (-), $m
  -124
  -522
  -661
  -817
  -988
  -1,172
  -1,367
  -1,570
  -1,778
  -1,987
  -2,197
  -2,405
  -2,610
  -2,810
  -3,006
  -3,197
  -3,384
  -3,567
  -3,747
  -3,925
  -4,103
  -4,280
  -4,459
  -4,640
  -4,825
  -5,016
  -5,213
  -5,417
  -5,629
  -5,852
  -6,085
Prev. year cash balance distribution, $m
 
  54
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  523
  591
  731
  894
  1,204
  1,569
  1,991
  2,470
  3,009
  3,607
  4,263
  4,978
  5,749
  6,576
  7,458
  8,392
  9,379
  10,416
  11,504
  12,642
  13,829
  15,067
  16,356
  17,697
  19,091
  20,539
  22,045
  23,610
  25,237
  26,929
Discount rate, %
 
  7.00
  7.35
  7.72
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.86
  11.40
  11.97
  12.57
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.70
  24.89
  26.13
  27.44
  28.81
PV of cash for distribution, $m
 
  489
  513
  585
  655
  801
  939
  1,063
  1,165
  1,241
  1,286
  1,300
  1,281
  1,233
  1,159
  1,064
  955
  836
  715
  597
  487
  386
  299
  225
  165
  118
  81
  55
  35
  22
  14
Current shareholders' claim on cash, %
  100
  93.8
  90.4
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0
  89.0

Rayonier Inc. operates as an investment arm of Rayonier TRS Operating Company. Rayonier, Inc. engages in the sale and development of real estate and timberland management, as well as in the production and sale of cellulose fibers in the United States, New Zealand, and Australia. The company operates in four segments: Timber, Real Estate, Performance Fibers, and Wood Products. Timber segment owns, leases, or manages timberlands and sells standing timber at auction to third parties, as well as sells delivered logs. Real Estate segment sells medium and large tracts of land with infrastructure. This segment holds development and rural properties primarily in the southeast United States. Performance Fibers segment manufactures cellulose specialties that are used principally in acetate textile fibers, cigarette filters, rigid packaging, LCD screens, photographic film, impact-resistant plastics, high-tenacity rayon yarn, pharmaceuticals, cosmetics, detergents, food casings, and food products; and absorbent materials that are used in disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes, and nonwoven fabrics. Wood Products segment primarily manufactures and sells dimension lumber used for residential and industrial construction applications. In addition, Rayonier involves in trading and exporting logs, lumber, and wood panel products. As of December 31, 2005, it owned, leased, or managed approximately 2.5 million acres of timberland and real estate. The company has a joint venture with RREEF Infrastructure to own and manage timber lands in New Zealand. Rayonier has elected to be treated as a real estate investment trust (REIT) for federal income tax purposes and would not be subject to federal income tax on its REIT income that it distributes to its shareholders. The company, formerly known as Rainier Pulp & Paper Company, was founded in 1926. Rayonier is headquartered in Jacksonville, Florida.

FINANCIAL RATIOS  of  Rayonier (RYN)

Valuation Ratios
P/E Ratio 16.1
Price to Sales 4.3
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 16.7
Price to Free Cash Flow -15
Growth Rates
Sales Growth Rate 44.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 176.9%
Cap. Spend. - 3 Yr. Gr. Rate 5.5%
Financial Strength
Quick Ratio 3
Current Ratio 0.3
LT Debt to Equity 72.9%
Total Debt to Equity 75.2%
Interest Coverage 7
Management Effectiveness
Return On Assets 9.9%
Ret/ On Assets - 3 Yr. Avg. 6.1%
Return On Total Capital 9.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5%
Return On Equity 15.7%
Return On Equity - 3 Yr. Avg. 8.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 33.5%
Gross Margin - 3 Yr. Avg. 24.2%
EBITDA Margin 47.5%
EBITDA Margin - 3 Yr. Avg. 39.2%
Operating Margin 32.4%
Oper. Margin - 3 Yr. Avg. 21%
Pre-Tax Margin 28.3%
Pre-Tax Margin - 3 Yr. Avg. 14.5%
Net Profit Margin 26.9%
Net Profit Margin - 3 Yr. Avg. 17.2%
Effective Tax Rate 2.2%
Eff/ Tax Rate - 3 Yr. Avg. -6.7%
Payout Ratio 58%

RYN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RYN stock intrinsic value calculation we used $788 million for the last fiscal year's total revenue generated by Rayonier. The default revenue input number comes from 2016 income statement of Rayonier. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RYN stock valuation model: a) initial revenue growth rate of 38.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7%, whose default value for RYN is calculated based on our internal credit rating of Rayonier, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Rayonier.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RYN stock the variable cost ratio is equal to 27.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $327 million in the base year in the intrinsic value calculation for RYN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.8% for Rayonier.

Corporate tax rate of 27% is the nominal tax rate for Rayonier. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RYN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RYN are equal to 1.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Rayonier operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RYN is equal to 2.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1412 million for Rayonier - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 121.517 million for Rayonier is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Rayonier at the current share price and the inputted number of shares is $3.4 billion.

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COMPANY NEWS

▶ Rayonier beats 2Q profit forecasts   [Aug-02-17 10:08PM  Associated Press]
▶ Rayonier Reports Second Quarter 2017 Results   [04:15PM  Business Wire]
▶ [$$] Oaktree Is Backing Tembec Deal After Rayonier Ups Offer   [Jul-24-17 03:22PM  The Wall Street Journal]
▶ Rayonier Announces Third Quarter 2017 Dividend   [Jul-21-17 09:13AM  Business Wire]
▶ 3 Top Dividend Stocks in Lumber   [Jun-08-17 10:00AM  Motley Fool]
▶ Rayonier CEO to Present at REITWeek   [May-24-17 04:05PM  Business Wire]
▶ 3 Top Lumber Stocks to Consider Buying in 2017   [May-22-17 07:53AM  Motley Fool]
▶ Rayonier Announces Second Quarter 2017 Dividend   [May-19-17 09:21AM  Business Wire]
▶ Rayonier misses 1Q profit forecasts   [May-03-17 07:23PM  Associated Press]
▶ Rayonier Reports First Quarter 2017 Results   [04:15PM  Business Wire]
▶ Trump moves to impose tariff on Canadian lumber   [Apr-25-17 10:51AM  Yahoo Finance Video]
▶ Rayonier CEO to Present at Upcoming Investor Conferences   [Feb-27-17 09:06AM  Business Wire]
▶ Rayonier Announces First Quarter 2017 Dividend   [Feb-24-17 04:17PM  Business Wire]
▶ Rayonier Reports Fourth Quarter 2016 Results   [04:15PM  Business Wire]
▶ Rayonier Announces Tax Treatment of 2016 Dividends   [Jan-20-17 04:00PM  Business Wire]
▶ Hedge Funds Are Buying American National Insurance Company (ANAT)   [Dec-09-16 06:21AM  at Insider Monkey]
▶ Hedge Funds Are Selling Outfront Media Inc (OUT)   [Dec-08-16 08:32AM  at Insider Monkey]
▶ How Eldorado Gold Corp (USA) (EGO) Stacks Up Against Its Peers   [Nov-28-16 02:54PM  at Insider Monkey]
▶ Rayonier Reports Third Quarter 2016 Results   [05:12PM  Business Wire]
Stock chart of RYN Financial statements of RYN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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