Rayonier Advanced Materials (NYSE:RYAM) strategy of expanding their footprints through investments in organic and inorganic growth opportunities has enhanced investors sentiments. RYAM stock jumped more than 50% in the last twelve months to $20 a share at present. The cash returns in the form of dividends and share buybacks adds to traders sentiments.

The company offers the quarterly dividend of $0.07 per share albeit it’s aggressive expansion strategies. The company has recently announced $100 million share buyback programs, which usually have a positive impact on share price, earnings per share and dividends.

RYAM stock has the 52-week trading range of $11.88 – $21.56 per share and its market capitalization stand around $1 billion.

Rayonier Advanced Materials Expansion Through Acquisitions

Rayonier Advanced Materials has recently acquired Tembec Inc, which will allow it to expand its purity cellulose businesses along with expanding its product offerings to forest products, newsprint, and paperboard businesses.

Its CEO looks substantially optimistic on future fundamentals. He said, “Looking forward over the next 3 years, we see opportunities to deliver approximately $155 million of EBITDA growth through our strategic pillars, as we capture up to $75 million of synergies in costs and market optimization, leverage shared R&D capacity to create new products and re-invest capital into high return capital projects.”

Financials Are Strengthening

The company’s business strategies are working considering impressive year over year revenue growth of 50% in the latest quarter, supported by revenue from Tembec acquisition. Its fourth-quarter adjusted earnings per share were standing around $0.50 per diluted common share, higher substantially from $0.18 per diluted common share in the same period last year.

Its cash generation potential has been allowing investing considerably in growth opportunities along with returning cash to investors.

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Rayonier Advanced Materials posted operating cash flow of $130 million in the last twelve months compared to capital investments of $39 million. Thus, the company is left with $91 million in free cash flows to support its acquisitions and cash returns.

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