Head to Head Review: Redwood Trust (RWT) & Its Rivals
Redwood Trust (NYSE: RWT) is one of 35 public companies in the “Mortgage REITs” industry, but how does it weigh in compared to its peers? We will compare Redwood Trust to related companies based on the strength of its institutional ownership, risk, earnings, valuation, profitability, dividends and analyst recommendations.
This is a summary of current recommendations and price targets for Redwood Trust and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Redwood Trust Competitors||115||840||838||32||2.43|
As a group, “Mortgage REITs” companies have a potential upside of 5.19%. Given Redwood Trust’s peers higher probable upside, analysts plainly believe Redwood Trust has less favorable growth aspects than its peers.
Earnings & Valuation
This table compares Redwood Trust and its peers gross revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Redwood Trust||$215.70 million||N/A||9.07|
|Redwood Trust Competitors||$15.57 million||$2.95 million||6.59|
Redwood Trust has higher revenue, but lower earnings than its peers. Redwood Trust is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.
Insider and Institutional Ownership
84.1% of Redwood Trust shares are owned by institutional investors. Comparatively, 57.0% of shares of all “Mortgage REITs” companies are owned by institutional investors. 2.3% of Redwood Trust shares are owned by company insiders. Comparatively, 3.2% of shares of all “Mortgage REITs” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Redwood Trust pays an annual dividend of $1.12 per share and has a dividend yield of 7.1%. Redwood Trust pays out 64.0% of its earnings in the form of a dividend. As a group, “Mortgage REITs” companies pay a dividend yield of 10.3% and pay out 82.1% of their earnings in the form of a dividend.
This table compares Redwood Trust and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Redwood Trust Competitors||47.46%||9.41%||2.48%|
Risk and Volatility
Redwood Trust has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Redwood Trust’s peers have a beta of 0.69, meaning that their average stock price is 31% less volatile than the S&P 500.
Redwood Trust beats its peers on 7 of the 11 factors compared.
About Redwood Trust
Redwood Trust, Inc., through its subsidiaries, focuses on investing in mortgage and other real estate related assets. The Company is engaged in mortgage banking activities. The Company operates through three segments: Residential Investments, Residential Mortgage Banking and Commercial. The Residential Investments segment includes a portfolio of investments in residential mortgage-backed securities (RMBS) retained from its Sequoia securitizations. The Residential Mortgage Banking segment consists of operating a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio. Its Commercial segment consists of investments in multi-family securities and commercial mortgage-backed securities, as well as a remaining commercial loan investment following the sale of the remainder of its commercial mezzanine loan portfolio.
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