I have cut trail signs out of cedar for use here in New Hampshire using my CNC router. Someone else finished them but I believe they used either shellac or polyurethane. I hiked the trails last year (about 5 years after I made the signs) and they still looked great.
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An alternative to wood would be the manufactured products for decks like Trex. Mask it, engrave, paint, remove mask. The material itself wouldn’t require further finishing.
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White oak is very rot resistant and is often used for signs. I prefer an oil finish to a sealer like poly because it lets the wood breath.
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Of the easily obtainable varieties: Teak is tops, & Cedar is close second, I believe.
Then of course there are the true exotics, like the one from Africa that is comparable to steel. I don’t recall the name, but Peter Hathaway Capstick wrote a short piece about it in Death in the Long Grass, where he noted that it is able to pierce through the metal floors of jeeps, and seriously injure the occupants!
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I know on old Battleships they had teak decks as it was considered the only wood that could realistically hold up to years of sea water. For that reason alone I would choose teak. I also know of a very expensive sailing yacht I encountered in Cancun had teak decking. Also, another wood I’m familiar with that holds up well to water is Lignum Vitae. The original breed of trees were used for rudders and other functions that required lubrication that wasn’t easily applied. Lignum vitae is a “self lubricating” wood from what a guy at Woodcraft told me a few years back. It’s also the heaviest wood in the world.
I hope this helps. 
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Starting with a nice cedar blank would be my first choice if I wanted to stay with real wooden signs.
If I just want to replicate wood, I might go with a sign-foam (like Precision Board or similar), which can be processed in many ways (router, saw, laser, sandblast, hand-tools) to looks like whatever I might want it to look like; wood, brick, stone, etc.
If longevity is more important than style, aluminum or ACM (such as DiBond or Alumacore) with vinyl letters.
If it really needs to last: water jet or plasma cut from 1/4" steel.
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Wow, everyone! Thank you so much for so many great suggestions! I’m going to visit my local woodcraft store armed with the suggestions from this list! I would prefer to use something local, but that may not be in the cards. Unless I just made a bunch of duplicates and replaced them often.
Thanks Again!
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Here are two sites to price check against when you go to your local place:
PerfectPlank
AllWood
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Interesting…that was not the PerfectPlank I was thinking of. Here is another manufacturer of it, unless I’m not catching the relation between the two…
https://www.freemansupply.com/products/machinable-media/perfect-plank-specialty-lumber
The Perfect Plank Co. supplies Freeman with industrial blanks in pine, mahogany, alder, poplar, and jelutong. The cedar, black walnut, and maple blanks are sold directly by The Perfect Plank company.
I just spoke with the current owner (the son of the founder) who mentioned that although they used to have a patent on the name, it has since been allowed to expire, and at least one other unaffiliated company now has a product called ‘perfect plank’.
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Ahh…good clarification. I wasn’t sure since Freeman didn’t have the cedar plank…wasn’t sure if it was different. Not the cheapest material though, am I right? It’s been a while since I’ve even thought of ordering any.
Not the cheapest, it’s a premium product.
Bookmarked! I was just thing about a similar project here in St. Croix so let us know how this turns out 
I’m reviving this thread, since most of us have our machines now. The DLNR is working on a master plan for signage, so I don’t have the go-ahead for the trails. However I’m now working with the City on an Adopt-An-Area for this 10-mile road that goes way up on a mountain and circles back around. It’s not a state park, but probably should be. So I’m tasking groups to adopt portions of the road to keep it clear of vegetation. I need to make at least 20 of these signs, so the less I have to do to each one, the better.
I’m thinking something small like a 12" wide by 6" tall. “This area proudly maintained by Tony Barnhill” or similar. Then there would be more info and URL on the back.
What do you guys think about using Proofgrade for this project? If I used Thick Maple Ply, then coated in spar urethane or just a polyurethane. I would cut two square holes in the center, then put a small carriage bolt through the other side, through a redwood stake, with a nut and washer on the other side. Maybe a coat of sparurethane after it’s all together?
I really appreciate and value your opinions on this project. We have some real rock stars on this forum.
Thanks
If you go with the ply, you’ll definitely want to coat it with spar…I finally had some swelling on one of the items that I built a year ago, that got exposed to a wet sponge every day. (Deliberately didn’t coat it to see what would happen. It did just what @dan said it would if left uncoated. It swelled up where it got wet.)
Took a long time, but it is sensitive to humidity. 
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I wouldn’t use PG ply - the core will suck up water from rain or just humidity.
My aesthetic would call for cedar planks - the ones used for cooking fish/etc on a grill work great. They come in different thicknesses and sizes.
You could leave them unfinished and they’ll turn grey over time. Or spray it with spar urethane. It’ll be really stable and not seriously expensive. You can get them in a size you wouldn’t have to cut before/after so that step would be skipped. You wouldn’t have to finish sand it either.
I’d think it would fit the trail motif.
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Thanks @jamesdhatch and @Jules I’ll be on the lookout for cedar planks. I think home depot has them in the grilling aisle. What about the PG hardwood? I know it’s only 6"x12", but that might not be enough.
That’s the biggest issue. You can likely find local suppliers of hardwood in larger sizes. You’ll need to finish it afterward for most hardwoods - using something like Spar Urethane to help weatherproof it. But unlike cedar or redwood, it will need re-treatment or it will degrade over time outside.