Thursday’s TSX breakouts: This stock brings a 3.7% yield and four 'buy' ratings

Today, 19 stocks are on the positive breakouts list, while the list of stocks with negative breakouts is at 16.

On today's positive breakouts list is Western Forest Products (WEF-T). Western Forest Products is the fifth-largest Canadian lumber company with operations in British Columbia. This is an investment that offers investors the combination of an attractive yield plus analysts are forecasting over 30 per cent earnings before interest, taxes, depreciation, and amortization (EBITDA) growth in 2016.

According to Bloomberg, there are currently four buy recommendations by analysts. Price target are as follows: $2.50, two analysts have targets of $2.65, and $3.00. The average one-year price target is $2.70, implying a potential price return of 23 per cent.

The consensus EBITDA is $111-million in 2015, rising 32 per cent to $146-million in 2016.

On Nov. 3, the stock price jumped 7 per cent after the company reported third-quarter results ahead of expectations. Adjusted EBITDA was $28.7 million, beating the consensus estimate of $23 million. Management's longer-term outlook is positive stating that, "We believe that in the mid to long-term, increased demand from a continued gradual recovery in the U.S. new home segment and continued demand from China, combined with a reduction in supply from traditional Canadian sources, will lead to a stronger pricing environment. Until U.S. new home construction returns to more normalized levels we expect commodity lumber pricing will continue to be volatile."

Western Forest pays shareholders a quarterly dividend of 2 cents per share, or 8 cents per year, equating to an annualized yield of 3.7 per cent.

Year to date, the share price of Western Forest Products is down 19 per cent due to downward pressure on lumber prices with lower demand from China. There is technical support at $2, near its 200-day moving average lies, and upside resistance at $2.30.

On a valuation basis, the rally in the stock price has driven the stock's valuation up above its historical average. The stock currently trades at an enterprise value to EBITDA of 6.3 times the 2016 consensus estimate, above its three-year average of 5.2 times.

As always, I strongly encourage readers to consult a financial advisor, and to do their own proper due diligence before taking any investment action.

Below is a list of stocks in the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows.

Editor's note: An earlier version of this story said Western Forest's annual dividend is 24 cents. It is 8 cents. This version has been corrected.