Starwood Property (STWD) AI Stock Analysis

• Market Cap: $6.88B
• Dividend Yield: 9.47%
• Average Volume (3M): 3.42M
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.84
• Revenue Growth: -15.62%
• EPS Growth: -31.74%
• Country: US
• Employees: 286
• Sector: Real Estate
• Sector Strength: 67
• Industry: REIT - Mortgage
• EPS (TTM): 0.45
• Shares Outstanding: 339,454,860
• 10 Day Avg. Volume: 2,600,174
• 30 Day Avg. Volume: 3,422,566
• PEG Ratio: -1.48
• Price to Book (P/B): 1.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.57
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 0.79
• Enterprise Value/Gross Profit: 5.82
• Enterprise Value/Ebitda: 1.22
• 1Y Price Target: $20.88
• Price Target Upside: 3.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Starwood Property Trust demonstrates strong financial performance, supported by revenue growth and profitability, stable balance sheet, and healthy cash flow, though financing activities warrant monitoring. The technical analysis is positive, indicating upward momentum. Valuation is fair with an attractive dividend yield. The latest earnings call highlighted strategic growth, despite some challenges, while the recent board appointment is a positive corporate event. Collectively, these factors contribute to a solid overall stock score.

Positive Factors

Capital Raising

Starwood Property Trust has raised nearly $1.3 billion of incremental capital, which will allow the company to fund new investments and retire $900 million of unsecured notes that mature soon.

Financial Performance

The active servicing portfolio increased, driving higher fee income.

Investment Capacity

The company remains the most active originator in its coverage with ample investment capacity to take advantage of its strongest deal pipeline since early 2022.

Negative Factors

Debt Issuance

The recent unsecured issuance provides more 'dry powder' for originations and investments, further proving the company as a regular issuer of unsecured debt, aiding its path toward an investment-grade rating.

Dividend Yield

Shares of Starwood Property Trust trade at 0.95x book value and a 10.0% current dividend yield, with a price target that equates to 1.19x book value and an 8.0% dividend yield.

Market Valuation

Shares trade at 1.01x P/BV (undepreciated BV) with a dividend yield of 9.5%.

Starwood Property Business Overview & Revenue Model

Company Description

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States, Europe, and Australia. It operates through four segments: Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, including distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

How the Company Makes Money

Starwood Property Trust primarily generates revenue through interest income from its extensive portfolio of commercial and residential loans, which include first mortgages, subordinated mortgages, and mezzanine loans. The company also earns income from real estate investments by acquiring and managing properties, which contribute to rental and leasing revenues. Additionally, Starwood Property Trust's infrastructure lending segment provides financing solutions for infrastructure projects, further diversifying its revenue streams. The company benefits from strategic partnerships, strong industry relationships, and a robust asset management platform, all of which enhance its ability to generate consistent earnings. Its diversified investment strategy and active management of its portfolio allow Starwood Property Trust to optimize returns and mitigate risks, contributing to its overall financial performance.

Starwood Property Financial Statement Overview

Summary

Starwood Property is performing well across all financial statements. The income statement shows strong revenue growth and profitability. The balance sheet demonstrates financial stability with low leverage. Cash flow is healthy, though attention is required on financing activities. Overall, the company is on a solid financial trajectory with excellent growth and stability.

Income Statement

Starwood Property has shown a strong revenue growth trajectory, with a significant increase from $1.02 billion in 2023 to $1.95 billion in 2024. The gross profit margin is excellent at 100% for both years. Net profit margin improved from 33.38% in 2023 to 18.48% in 2024, indicating strong profitability. However, EBIT and EBITDA margins are also strong, signaling efficient operations. The revenue growth rate is impressive, contributing to a high score.

Balance Sheet

The company has a robust balance sheet with zero total debt in 2024, significantly improving the debt-to-equity ratio. The equity ratio has remained stable. Return on equity decreased slightly from 2023 to 2024, indicating a need for further efficiency improvements. Overall, the balance sheet reflects stability and low leverage risk.

Cash Flow

Starwood Property displays strong operating cash flow, with a significant increase in free cash flow from 2023 to 2024. The free cash flow to net income ratio suggests effective cash management. However, fluctuations in cash flow from financing activities require monitoring. The free cash flow growth rate is positive, contributing to a stable cash flow position.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.84B	1.95B	1.02B	1.45B	885.14M	822.44M
	Gross Profit
1.11B	1.95B	777.18M	1.41B	773.48M	704.76M
	EBIT
774.66M	1.75B	2.55M	1.78B	456.41M	351.89M
	EBITDA
1.19B	1.72B	54.24M	1.55B	0.00	0.00
	Net Income Common Stockholders
317.86M	359.93M	339.21M	871.48M	447.74M	331.69M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
311.97M	911.09M	258.10M	18.66B	217.36M	563.22M
	Total Assets
69.50B	62.56B	69.50B	79.04B	83.85B	80.87B
	Total Debt
19.56B	9.01B	8.87B	21.83B	17.02B	7.00B
	Net Debt
19.24B	8.63B	8.67B	21.57B	16.80B	6.44B
	Total Liabilities
62.48B	55.36B	62.48B	71.84B	77.20B	76.01B
	Stockholders Equity
6.25B	6.44B	6.25B	6.46B	6.07B	4.49B
Cash Flow		Free Cash Flow
803.35M	646.59M	503.51M	188.52M	-1.02B	1.02B
	Operating Cash Flow
804.77M	646.59M	528.60M	213.74M	-989.98M	1.05B
	Investing Cash Flow
56.15M	2.08B	855.07M	-2.95B	-4.28B	-911.80M
	Financing Cash Flow
-1.42B	-2.50B	-1.45B	2.80B	4.87B	13.28M

Starwood Property Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STWD, the sentiment is Positive. The current price of 20.27 is above the 20-day moving average (MA) of 19.25, above the 50-day MA of 19.14, and above the 200-day MA of 18.93, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 68.26 is Neutral, neither overbought nor oversold. The STOCH value of 96.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STWD.

Starwood Property Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STWD	71 Outperform	$6.88B	21.18	4.90%	9.47%	-15.62%	-31.74%
LADR	71 Outperform	$1.36B	13.01	6.80%	8.64%	-12.51%	7.76%
ABR	68 Neutral	$2.03B	10.68	7.77%	16.27%	-15.99%	-36.34%
RITM	68 Neutral	$6.19B	9.74	9.36%	8.57%	26.78%	-19.34%
AGNC	67 Neutral	$9.37B	23.19	5.05%	15.69%	-2.35%	-56.25%
BXMT	63 Neutral	$3.37B	―	-2.06%	10.34%	-20.46%	-1436.71%
Sector *	60 Neutral	$2.81B	10.29	0.39%	8508.26%	5.90%	-17.41%

Starwood Property Corporate Events

Starwood Property Expands Board, Appoints New Vice Chairman

On March 20, 2025, Starwood Property Trust, Inc. announced the expansion of its Board of Directors from nine to ten members, appointing Jonathan Pollack as a new director and Vice Chairman, effective April 1, 2025. Pollack, who will also serve on the Investment Committee, brings extensive experience from his previous role at Blackstone Inc. and his upcoming position as President of Starwood Capital Group, which may enhance Starwood Property’s strategic positioning in the real estate investment market.