Comparing Redwood Trust (RWT) & Its Peers
Redwood Trust (NYSE: RWT) is one of 37 public companies in the “Mortgage REITs” industry, but how does it contrast to its peers? We will compare Redwood Trust to related companies based on the strength of its valuation, profitability, analyst recommendations, dividends, risk, institutional ownership and earnings.
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||49.55%||10.37%||2.69%|
This is a summary of current ratings and target prices for Redwood Trust and its peers, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Redwood Trust Competitors||115||846||844||32||2.43|
As a group, “Mortgage REITs” companies have a potential upside of 3.27%. Given Redwood Trust’s peers higher possible upside, analysts clearly believe Redwood Trust has less favorable growth aspects than its peers.
Institutional and Insider Ownership
84.5% of Redwood Trust shares are held by institutional investors. Comparatively, 57.6% of shares of all “Mortgage REITs” companies are held by institutional investors. 2.3% of Redwood Trust shares are held by company insiders. Comparatively, 3.3% of shares of all “Mortgage REITs” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Redwood Trust has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Redwood Trust’s peers have a beta of 0.71, suggesting that their average share price is 29% less volatile than the S&P 500.
Valuation & Earnings
This table compares Redwood Trust and its peers revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Redwood Trust||$215.70 million||N/A||9.40|
|Redwood Trust Competitors||$320.94 million||$123.24 million||1.57|
Redwood Trust’s peers have higher revenue and earnings than Redwood Trust. 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.
Redwood Trust pays an annual dividend of $1.12 per share and has a dividend yield of 6.8%. 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 10.1% and pay out 80.4% of their earnings in the form of a dividend.
Redwood Trust peers beat Redwood Trust on 6 of the 11 factors compared.
Redwood Trust Company Profile
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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