Lumber stocks are publicly traded companies that cut, process, market, and sell wood products. After the post-2020 boom that pushed many prices and valuations higher, the sector has been more volatile through 2024 and 2025 as higher interest rates and weaker homebuilding activity weighed on demand. Several large Canadian producers reported losses through 2025, highlighting how sensitive these businesses are to swings in housing and lumber prices.
For investors looking to gain exposure to Canada’s long-term need for housing and the shift toward low-carbon, wood-based construction, lumber stocks can still be an attractive alternative to direct real estate ownership. That said, the path to returns may be choppier than it was during the boom years, so investors should weigh near-term macro risks against potential long-term upside from constrained housing supply and growing interest in sustainable building materials.
For investors looking to profit off Canada’s immense demand for timber and housing, lumber stocks can be an attractive alternative to full-on real estate investing. Let’s delve into the top Canadian lumber names for 2026 and see how recent earnings, pricing trends, and housing data might affect whether they belong in your holdings.
Related: List of stocks in the TSX materials sector
What are lumber stocks?
Simply put, lumber stocks are companies whose main products are wood or wood pulp. A sawmill company that cuts and sells 2x4s, for instance, is a lumber stock, as is a company that makes paper reams and cardboard packaging boxes.
While the companies in this market sector are incredibly diverse, they typically fall into one of these categories:
- Roundwood companies produce wood in “log” form, such as poles, posts, and girders (think utility poles used to connect telephone wires).
- Sawn wood companies saw wood in different dimensions and forms for use in home building, furniture making, and home renovations.
- Pulp and paper companies make paper and cardboard products from wood pulp.
Top Canadian lumber stocks
Canada is the second largest producer of wood in the world, with wood exports making up $17 billion in annual sales. As such, the Toronto Stock Exchange (TSX) has some of the largest lumber companies, including the following three:
| Lumber Stocks | Description |
| West Fraser Timber (TSX:WFG) | Vancouver-based wood company that manufactures and sells lumber |
| Canfor (TSX:CFP) | Softwood lumber and pulp company with operations across Canada |
| Stella-Jones (TSX:SJ) | Lumber producer that makes utility poles and lumber used in home building |
1. West Fraser Timber
Based in Vancouver, West Fraser (TSX:WFG) is one of Canada’s largest and most diversified wood products producers, manufacturing lumber, OSB, engineered wood, pulp, and paper for customers across North America and Europe. Its acquisitions of Norbord in 2021 and Spray Lake Sawmills in 2023 strengthened its position as a global OSB leader.
Market conditions were difficult in 2024, with revenue declining from $1.705 billion in Q2 to $1.437 billion in Q3 and earnings falling to an $83 million loss. High fibre costs also contributed to the curtailment of the Lake Butler mill. Still, West Fraser entered 2025 on stronger footing after removing 820 million board feet of high-cost capacity (12% of its total) over the past three years.
By late 2025, the stock had a $4.7 billion market cap and traded nearly 40% below its peak. The company ended Q3 with US$1.6 billion in liquidity and continued to return capital through buybacks and dividends while investing US$90 million in efficiency projects, including the Henderson mill upgrade now entering commissioning. European OSB markets also showed early signs of recovery.
Analysts expect a short-term revenue decline to US$5.5 billion in 2025 and a loss per share of US$3.86, but project a strong rebound by 2029, with US$7.1 billion in revenue, US$8.52 in adjusted EPS, and US$912 million in free cash flow. At 10× forward FCF, shares could more than double. West Fraser is also forecast to pay a US$1.28 dividend in 2025 with a sustainable sub-50% payout ratio.
Supported by an investment-grade balance sheet and an optimized asset portfolio, West Fraser is well positioned to outperform when housing activity and lumber demand recover.
2. Canfor
Another Vancouver-based forestry giant, Canfor (TSX:CFP) is a North American leader in integrated forest products, producing softwood lumber, engineered wood, and sustainable wood products. The company operates mills across B.C., Alberta, the U.S. South, and Europe, with past acquisitions like Millar Western strengthening its portfolio.
Canfor faced steep losses in 2023 and 2024, with operating losses of $532 million in 2023 and further losses of $250.8 million in Q2 2024 and $559.7 million in Q3. Western Canadian operations remained challenged by weak pricing and high fibre costs, though its U.S. South and European businesses continued to perform solidly. Pulp markets also showed modest improvement late in the year.
By 2025, results began to stabilize. Canfor generated $62 million in adjusted lumber EBITDA in Q2 (or $68 million excluding restructuring), supported by strong European performance and the ramp-up of low-cost Southern mills, even as it closed its Estill and Darlington facilities in South Carolina.
A major strategic shift is underway with the planned acquisition of three Swedish sawmills from Karl Hedin. After closing, Canfor’s operating mix will sit at roughly 35% U.S. South, 35% Sweden, and 30% Western Canada—reducing reliance on U.S. markets ahead of higher duties and securing high-quality Swedish fibre. Management plans to operate through the cycle rather than pursue further curtailments.
Analysts expect a significant long-term rebound: after a projected loss per share of $3.07 in 2025, adjusted EPS is forecast to rise to $3.59 by 2029. At 10× forward earnings, the stock could potentially triple over the next four years.
3. Stella Jones
Stella-Jones (TSX:SJ) is a major Canadian lumber producer focused on two core segments: pressure-treated wood such as utility poles, railroad ties, and residential lumber, and traditional logs and lumber for construction projects.
The company has been profitable for more than 20 years and remains the only dividend knight in the industry with two decades of consecutive payout increases. Its products support essential infrastructure, which creates steady replacement demand from railroads, utilities, and municipalities even during economic slowdowns.
In Q3 2024, Stella-Jones reported sales of $915 million, slightly below last year’s $949 million. Operating income fell to $130 million and EBITDA reached $162 million with a 17.7 percent margin. Net income was $80 million or $1.42 per share. Despite softer results, the company maintained a strong financial position with $342 million in available credit and reiterated its 2025 targets of roughly $3.6 billion in sales and an EBITDA margin above 17 percent.
Stella-Jones continues to appeal to long-term investors because of its stable demand base, consistent cash flow, and reliable dividend growth. Its 1.5 percent yield is modest but supported by decades of profitability.
New U.S. tariffs are a headwind. A recently added 10 percent duty on Canadian softwood lumber, on top of the existing 35 percent rate, pushes total tariffs to about 45 percent. This raises export costs and pressures competitiveness for producers such as West Fraser and Stella-Jones.
Even with these challenges, Stella-Jones’ essential-service products and long track record of disciplined growth make it a dependable choice for investors seeking income and steady capital appreciation.
Investing in foreign lumber markets
Though you can find plenty of exciting lumber stocks within Canada, you might also want to look down south to the U.S. to diversify your holdings. For those interested in international stocks, here are three U.S. lumber companies you might want to consider.
| Lumber Stocks | Description |
| International Paper | Major producer of paper products, such as Hammermill, Williamsburg, and Springhill |
| Boise Cascade | Manufacturer of wood products and building materials used to construct homes |
| Resolute Forest Products | Diversified lumber company with a wide range of products, such as newsprint, commercial paper, and timber |
Are lumber stocks right for you?
The good thing about timber is that it remains essential to homebuilding, renovation, and furniture manufacturing—sectors that continue to show resilience across Canada and the U.S. As long as housing demand stays elevated, lumber stocks can offer meaningful upside for investors.
Lumber markets in 2024 and 2025 have seen far more stability than the extreme volatility of earlier years. After the massive price swings of 2020–2022, prices settled into a narrower range, averaging $450–$550 per thousand board feet through late 2024 and early 2025. Though well below peak pandemic levels, these prices remain historically strong and continue to support healthy margins for efficient producers. At the same time, new supply-side constraints persist: Canadian lumber production declined roughly 8–10% year-over-year in 2024, weighed down by mill curtailments, labour shortages, and wildfire disruptions in Western Canada.
The industry remains highly cyclical, with its fortunes tied closely to North American housing activity. While interest rates moderated slightly in 2024 and early 2025, housing starts have yet to fully rebound, keeping demand uneven. This has contributed to ongoing price fluctuations—monthly dips driven by slower U.S. homebuilding followed by rebounds tied to inventory restocking. Such volatility complicates planning for producers and underscores the importance of cost-efficient operations.
Operational challenges continue to test the sector. Some mills are contending with elevated inventories after periods of overproduction, forcing temporary downtime to rebalance supply. Transportation bottlenecks also remain an issue, as rail capacity has struggled to keep pace with outbound lumber shipments during high-demand periods.
Still, strong long-term demand fundamentals remain intact. Structural wood products continue to gain adoption in sustainable construction, and global interest in low-carbon building materials is rising. While risks of a market correction persist if housing demand softens, the combination of stable pricing, disciplined production, and the growing push toward greener construction materials keeps Canadian lumber an important sector for investors to watch heading into 2026.