Key Highlights

  • Starwood Property Trust (STWD) pays $0.48 per quarter, a Yield of about 13.37%; the next ex-dividend date is Sept. 30.
  • Q2 distributable Earnings were $0.40 per share, below the dividend.
  • About $82.02 million traded versus a typical $58.81 million, and the 14-day RSI is 24.5.

Starwood Property Trust (NYSE:STWD) fell about 2.3% to $14.01 in pre-market trading after its Dividend update, while peers rose. The commercial Mortgage REIT yields about 13.4%, but Q2 distributable earnings of $0.40 per share fell short of its $0.48 quarterly dividend, and analysts have cut targets as higher rates weigh on commercial real estate.

Starwood Property Trust's Dividend Yield stands at about 13.4 percent. Starwood Property Trust, led by Barry Sternlicht, is one of the largest U.S. commercial mortgage REITs, with businesses in commercial lending, infrastructure lending, property ownership and loan servicing.

The dividend gap is the concern. STWD has held its $0.48 quarterly payout for years, but Q2 distributable earnings covered only about 83% of it. Four analysts cut their targets about six weeks ago, to between $17 and $20. The stock trades at about 0.8 times its $17.53 book value, as the market weighs whether the payout will be reset.

Starwood Property Trust (STWD) Underperforms Peers

Rithm Capital rose 0.8%, Dynex 0.4% and AGNC 0.8%, for a peer median of +0.8%, while STWD fell 2.3%. The $0.34 move equaled about 1.1x the 14-day average true range of $0.30. STWD is down 22.0% year-to-date and 11.8% over the past month, and its 52-week range is $14.33 to $20.14, so the pre-market price is below the prior low. The market Capitalization is about $5.6 billion.

STWD Technical Levels: Oversold

STWD trades below its 20-day Moving Average of $15.43, its 50-day of $16.01 and its 200-day of $17.27.

The 14-day RSI is 24.5. RSI measures buying versus selling pressure on a 0 to 100 scale, and readings under 30 are oversold, often a point where declines slow.

MACD is -0.39, below its -0.31 signal line. MACD tracks momentum, and the widening gap shows selling pressure is building.

ADX is 32.2. ADX measures trend strength, and readings above 30 confirm a strong downtrend.

Resistance is $14.67, then $15.18.

Fundamentals and Analyst View

Trailing-twelve-month Revenue rose 10.7% to $2.03 billion, and cash was $367.59 million, with 370,628,310 shares outstanding. Debt-to-equity is 3.65. Analysts rate STWD a Buy with an average target near $19.88.

Peers Moving on This News