Investing in Lumber Stocks

After wild swings in prices throughout the COVID-19 pandemic, lumber prices have been stable through the last few years, with futures hovering between $500 and $700 per thousand board feet. Lumber is a key input in homebuilding and home improvement. With the housing market sluggish, lumber prices are still down significantly from their peak during the COVID-19 pandemic.

Demand for paper may have crumpled in the digital era, but that hasn't stopped International Paper (IP +4.10%) from delivering solid returns for investors, especially with its dividend considered. International Paper is one of the world's biggest paper manufacturers, but it produces mostly industrial packaging, such as the cardboard that allows it to benefit from the boom in e-commerce.

Industrial packaging accounts for more than 80% of International Paper's revenue and is the company's largest business segment. After the 2021 spinoff of its printing paper business, Sylvamo (SLVM +4.85%), the company has moved toward a pure play in that category.

International Paper's only other business segment was global cellulose fibers, which includes supplying paper products such as fluff and pulp for a wide range of products, but it sold that in August 2025 to private equity firm American Industrial Partners for $1.5 billion. In January 2025, it acquired DS Smith, a European leader in packaging, in a deal estimated at $7.2 billion.

The company's revenue has jumped more than 50% through the first three quarters of 2025 thanks to the DS Smith acquisition, and it announced the closure of packaging facilities in California and Kentucky in November 2025, part of its strategy of streamlining costs.

The company is now focused on driving results through the 80/20 rule to accelerate profitable growth, which means recognizing its most profitable customers and investing in them accordingly.

International Paper expects the DS Smith purchase to enhance its innovation and geographic reach and improve its scale. International Paper has long paid a dividend to investors (currently a 5% dividend yield) and trades at a reasonable forward price-to-earnings (P/E) ratio, making this stock a solid choice for both value and income investors.

2. Boise Cascade

Boise Cascade (BCC +6.19%) has been one of the best-performing lumber stocks in recent years, as the stock more than tripled from the start of 2020 to the end of 2024, though it's since cooled off. Profits soared through 2024 as the company benefited from higher lumber prices, which are still well above pre-pandemic levels.

The manufacturer of wood products has struggled more recently with the soft housing market since the company says demand for its products is correlated with new residential construction. Through the first half of 2025, revenue was down slightly, but interest rate cuts could help give the housing market a boost.

Like International Paper, Boise Cascade continues to grow through acquisitions, acquiring the Parksite door shop with 22 locations in Florida in December 2024. The company also pays a modest but consistent dividend, currently yielding 1.3%. Since most of the company's business comes from building materials, its prospects are closely tied to the housing market, so it's a good choice if you're bullish on housing.

3. West Fraser Timber Company

The West Fraser Timber Company (WFG +3.60%) produces much of its wood from publicly owned forests in Canada, where it has licenses to harvest. Although more than 40% of the company's 2024 revenue came from lumber, West Fraser also makes pulp, paper, and engineered wood products, like plywood panels.

In February 2021, the lumber producer acquired Norbord, another Canadian timber company and the world's biggest producer of oriented strand board (similar to particleboard), for $3.1 billion. It followed that up with the acquisition of Spray Lake Sawmills in 2023. Like Boise Cascade, West Fraser's business is correlated with new construction, and its revenue has declined by 15% through the first three quarters of 2025.

However, its North American engineered wood products, which benefited from the Norbord acquisition, have been strong and profitable. Long-term trends in the North American housing market should benefit West Fraser's lumber business as new construction should eventually pick up.

Profits for West Fraser can be volatile, as is the case for many commodity producers. The company also currently offers a 2.1% dividend yield.

UFP Industries (UFPI +3.46%) is a large, diversified lumber and wood-based materials company. It operates in three segments: construction, packaging, and retail solutions such as decking, siding, and fencing. Like its peers, UFP has struggled with a slow housing market as sales in all three of its segments fell in the first half of 2025.

The company expects those challenges and the impact of proposed tariffs to persist, though it's focused on controlling costs and driving efficiencies. It's also on the lookout for acquisitions and recently acquired C&L Wood Products, an Alabama-based small manufacturer of pallets and mulch. C&L generated $24.8 million in sales during the 12 months ended in November 2024. The company has made moves to expand in 2025, acquiring a facility in Twin Falls, Idaho, and a 30-acre site in Lackawanna, N.Y., for a composite decking facility.

Lower commodity prices tend to lower valuations in the industry, creating opportunities for industry leaders like UFP Industries to acquire new companies.

5. Weyerhaeuser

Weyerhaeuser (WY +2.93%) has a different business model from the other companies on the list. It operates as a real estate investment trust (REIT), specializing in timberlands.

It now has 12.4 million acres in the U.S., and manages another 14 million in Canada. Weyerhaeuser is significantly bigger than any other timberland REIT, and the company makes money by selling timber grown on its property. It also owns significant milling and production operations.

Because of its direct exposure to lumber prices, Weyerhaeuser benefits when lumber prices go up. However, the company has also struggled with a weak housing market this year, and it has accelerated its share repurchases to take advantage of the lull in the industry.

Both revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were down during the third quarter of 2025 as the company noted very challenging market backdrop, but it said it was well-positioned to benefit from longer-term demand fundamentals.

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Be careful with commodities

Investing in commodity stocks can be difficult because prices move for unpredictable reasons, including natural disasters, geopolitical tensions, and market shocks, such as the COVID-19 pandemic. The good news for lumber investors is that lumber is an essential ingredient in homebuilding and home furnishings.

Because of its omnipresence and durability, its status as a key input in those industries is unlikely to change. Structural tailwinds in the U.S. seem to be building for lumber since there's a significant lag in housing inventory. An increasing acceptance of remote work should also favor homebuilding and home improvement.

The best commodity stocks have competitive advantages, allowing the businesses to do well even in difficult economic conditions. The businesses above have all stood the test of time and have stakes in growing industries, such as e-commerce and homebuilding.

International Paper, Boise Cascade, West Fraser, UFP Industries, and Weyerhaeuser look well-positioned for the long term for investors looking to gain exposure to lumber.