Why Shares of Domtar Corp. Jumped Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What: Shares ofDomtar Corp. jumped as much as 10% today after thepaper and personal care product maker released fourth-quarter earnings.

So what: Quarterly revenue rose slightly to $1.38 billion and net income was up 9% to $71 million, or $1.10 per share. On an adjusted basis, which pulls out one-time items that affect earnings, the company earned $1.41 per share, easily topping the analyst consensus estimate of $0.90.

Now what: However, management does not expect significant revenuegrowth in its pulp and paper segment in 2015due to volatility in pulp markets and a strong dollar. But management has also controlled costs effectively in recent months. This isn't a high-growth business, but with shares trading at just 11 times earnings and a dividend yield of 3.9% I think it's a good value stock and one that can move higher in coming years.

The article Why Shares of Domtar Corp. Jumped Today originally appeared on Fool.com.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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