Breaking news out of timber investment trust Plum Creek (NYSE:PCL): Um, pretty much nothing happened this quarter.

In reviewing the company's earnings release for Q1 2005, we see that Plum Creek sold off some coal assets. Considering the high price that coal is fetching, the profits from selling off coal-bearing land, and the fact that Plum Creek is a timber trust and not a coal trust, the sell-off was probably a good move.

The company also sold some of its "non-strategic timberlands." If we take the company's word that the lands in question were indeed unnecessary in furthering Plum Creek's strategic goals, and that the company was able to get a good price for the lands (not much of a stretch given the recent boom in real estate values across the land), this move also was not a bad idea.

Hmm. Cash levels stayed pretty steady at just under $350 million; debt remained stable at $1.9 billion; share dilution was negligible -- good, good, and good.

And, oh, yes, the bad news: Profits declined from $0.84 to $0.66 per diluted share vs. the year-ago quarter. Well, what else would you expect? The company sold $120 million more worth of real estate last year than it did this year, so of course profits declined. Excepting sales of "non-strategic" lands, an investor in Plum Creek should take it as a good thing that the company didn't mortgage its future by selling off a bunch of prime real estate just to make its numbers. After all, Plum Creek isn't in the business of buying and selling land. Those kinds of revenue streams can be useful for juicing profits when opportunities present themselves, but as a general rule, investors in a timber trust like Plum Creek should pretty much confine themselves to asking just three things of their company:

  1. Husband your resources well, so that they can continue producing revenue and profits, ideally, forever.

  2. Keep paying out that hefty 4.3% dividend, which is more than twice the payout of the average S&P 500 company.

  3. Stop at No. 2.

The way this Fool sees it, that's precisely the game plan Plum Creek management is sticking to. And for that, its management should be applauded and left to tend to their trees in peace.

And now, for some excitement, revisit Plum Creek's recent glorious ride to the Elite Eight of the Motley Fool's Stock Madness Tournament:

Mathew Emmert believes your best investment bet is in high-dividend paying companies. Do you agree? Then take a free, no-obligation trial to Motley Fool Income Investor today.

Fool contributor Rich Smith has no position in any of the companies mentioned in this article.