Investment Analyst: Timber Looking Like a Good Investment

People in the hardwood flooring and building industries are all too aware of skyrocketing wood prices, but InvestorPlace contributor Aaron Levitt sees an opportunity to make big bucks by investing in timber.

In a recent article, Levitt lays out the facts: between China's demand for building materials and the U.S. housing recovery, there is substantially more demand for timber than the surviving sawmills can produce. While these same facts meant Armstrong, Mohawk, Mannington and many other flooring manufacturers had to increase their prices, individuals invested in Weyerhaeuser (NYSE:WY), Plum Creek (NYSE:PCL), Rayonier (NYSE:RYN) and Potlatch (NYSE:PCH) will see high dividends, Levitt says.

He notes that investment in timber is also a relatively safe bet: "If housing construction begins to cool or flatten out, the firms' dividends-ranging between 2 and 3.2 percent-can serve as a cushion for investors. And these companies maintained their dividends as the lumber market turned south during the housing crisis, making them prime choices for playing the rise in timber."